Mixin Network causes the crypto industry a $200m loss

Mixin Network causes the crypto industry a $200m loss

Time Stamp: October 6, 2023 12:00 AM
  • On the 25th of September, 2023, Mixin Network temporarily suspended all deposits and withdrawal services.
  • Several perpetrators breached its blockchain security and accessed its database, stealing about $200 million in funds.
  • Mixin Network utilized the POS conses mechanism enforced by Intel SGX, becoming one of the first blockchain companies to use it.

The era of digital assets has taken the entire globe by storm. Organizations, governments, and individuals have turned to the crypto ecosystem, each with a valid reason. Blockchain technology has enabled multiple innovators to develop sophisticated systems that improve and redefine several industries. Despite the numerous applications of blockchain technology, it has yet to prosper in its initial sector, the crypto industry.

Today, multiple startups have emerged to dominate the trillion-dollar market. Its success has led to branch applications like CBDCs MemeCoins and the development of the fintech industry. Unfortunately, its promising nature has become its ultimate undoing as the industry faces constant threats from hackers. In recent news, Mixin Network, a famous Hong Kong-based Crypto Company, recently suffered a breach within their blockchain security, causing a loss of $200 million.

Unfortunately, crypto hacks are no foreign concept to the industry; however, the recent attack begs the question, is blockchain’s rise to fame the leading cause of its downfall? Despite numerous attempts, safeguarding digital assets remains an uncharted front regarding crypto.

Who is Mixin Network?

The success of Bitcoin shook the very foundations of the financial systems. Given the many skeptics, its rise to glory was unprecedented. However, despite all odds, Bitcoin became the very foundation of the crypto ecosystem. Gradually, many governments adopted and embraced its decentralized nature, inspiring many to kickstart their ideas on blockchain applications.

Initially, many first-world countries sought to utilize digital assets to benefit themselves, but it was more complex. Although the value of digital assets is gradually growing, developers never intended to serve a government with centralized control. Its decentralized nature proved difficult for many organizations to integrate within their system. This very limitation inside Xiaodong Feng is to create a multi-tier decentralized network, the Mixin Network. 

Mixin Network

Mixin Network suffers severe losses after the perpetrator bypasses its robust blockchain security gaining access to over $200 million in crypto.[Photo/Medium]

One of the early limitations of blockchain technology is its inability to co-exist with traditional networks. The dynamics between both presented an issue in which the Mixin Network resolved through its different layers.

The Hong Kong-based network contains three main components: the central Kernel, the dynamic domains, and the outer domain extensions. In addition, it also includes an underlying public blockchain network, allowing users to develop their Dapps. It also utilized the POS consensus mechanism enforced by Intel SGX, becoming one of the first blockchain companies to use it.

Mixin Exchange has provided sufficient blockchain security for the past few years through its distributed key duplications and secret sharing mechanism. In addition, Xiaodong designed the Hong Kong-based crypto company to provide a platform that ensures easier interoperability between different technology and blockchain. Mixin Networks and Extended Domains can easily support blockchain networks to accomplish this feat.

Also, Read Blockchain Security: Lessons learned in 2022, expectations for 2023.

This has been one of the main selling points since it has allowed many developers to integrate diverse features in their DApps while building on the network. Unfortunately, due to its sophisticated technology, it contained numerous features while still existing within the crypto ecosystem. Its fame and glory have resulted in the organization losing several millions due to a recent crypto hack.

Mixing Network losses $200 million

On the 25th of September, 2023, Mixin Network temporarily suspended all deposits and withdrawal services. According to the Hong Kong-based crypto Company, several perpetrators breached its blockchain security and accessed its database, stealing about $200 million in funds.

They posted comments on social Media Platform X stating that Mixin Ntwork’s cloud services provider database was attacked, resulting in the loss of $200 million. The company also wrote, ” We have temporarily suspended all deposit and withdrawal services on Mixin Network. After discussion and consensus among all nodes, we will reopen these services once the vulnerabilities are confirmed and fixed.”

The Hong Kong-based crypto company has contacted Google and SlowMist, a renowned crypto security firm, to aid the investigation. Despite the efforts of Mixin Network to reassure its users, the damage is already done. Since its founding, the organization has claimed to provide open-source software that places security, privacy, and decentralization first. So far, it lived up to its claim and gained over one million users by Q3 of 2023. 

When writing, it remains unclear how the crypto hack occurred. Mixin Network is a decentralized platform; thus, its storage medium would possess a similar structure. This generally means the perpetrators may have acquired a private key to access its cloud database without triggering its blockchain security features.

Unfortunately, they are yet to release any precise information, but Google has acquired the aid of Mandiant, a cyber security repose firm, to investigate the matter. Melanie Lombardi confirmed in an email that Mixin Network will work with Mandiant to uncover the mystery.

Also, Read Understanding the flaws of Metaverse Security and where to improve.

The Hong Kong-based crypto company has announced an unspecified solution for stolen digital assets. 

According to Rekt, the crypto hack represents the most significant breach of blockchain security in 2023.

Conclusion

The digital asset adoption rate is a growing concept, with many organizations still finding new ways to achieve it. Currently, worldwide and more in Africa, many startups have opted to turn to blockchain technology for solutions. Despite this, the recent Crypto hack places a significant blemish in 2023.

Mixin Network may find a way to mitigate the answer, but blockchain security has proven its limitations. Its relatively new nature has allowed hackers and illicit organizations to exploit it. As a result, the entire ecosystem has lost billions, and this trend may not change soon. Despite this, blockchain applications have proven their use beyond the finance sector. We may have to accept that the technology must be updated to provide adequate security in our financial sector.

Also, Read Use cases of blockchain technology in cyber security.

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