On Sunday, Mixin Network, a cryptocurrency company headquartered in Hong Kong, disclosed a security breach in which hackers made off with approximately $200 million. Mixin is a protocol crafted to tackle blockchain scalability challenges, albeit with the trade-off of relying on a centralized database.
“In the early morning of September 23, the database of Mixin Network’s cloud service provider was attacked by hackers, resulting in the loss of some assets on the mainnet. The funds involved are approximately $200 million. Deposit and withdrawal services on Mixin Network have been temporarily suspended. After discussion and consensus among all nodes, these services will be reopened once the vulnerabilities are confirmed and fixed,” in a statement posted by Mixin Network on X.
Mixin Network functions much like a layer-2 protocol, aiming to enhance the cost-effectiveness and efficiency of cross-chain transfers. However, as numerous X users have highlighted, the issue with this approach is its dependence on a centralized database, which introduces a vulnerability with a singular point of failure.
In their July monthly report, Mixin Network disclosed that the total value of the top 100 assets on their platform exceeded $1.1 billion. The report also indicated a significant number of transactions, with 663,489 unique monthly Bitcoin (BTC) transactions and 179,647 Ethereum (ETH) transactions during the same month.
The company stated that it reached out to Google and the cryptocurrency security firm SlowMist for assistance in conducting the investigation.
Mixin Network is a decentralized exchange and cross-chain network known for its open and transparent ledger maintained by 35 mainnet nodes. The company emphasizes security, privacy, and decentralization as its core principles, boasting one million users as of July. Despite its decentralized nature, the recent hacking incident involving Mixin’s cloud database has raised questions about how the attackers managed to steal funds, creating uncertainty about the network’s security.
(Source: Sam Reynolds | CoinDesk | Lorenzo Franceschi-Bicchierai | TechCrunch)
