Jeff “Jihoz” Zirlin, co-founder of blockchain gaming leader Axie Infinity and its sidechain network Ronin, reported that his personal crypto wallets were hacked on February 23rd. This resulted in the theft of approximately $9.7 million worth of ether.

Zirlin confirmed on Twitter that two of his wallet addresses were exposed, allowing an unauthorized transfer of funds by an as-yet-unidentified party. He was quick to assure that Axie Infinity, Ronin and its operator Skye Mavis had nothing to do with the security incident. “The attack is limited to my personal accounts and has nothing to do with the verification or operation of the Ronin network,” Zirlin tweeted. He expressed confidence that strict safety measures will continue to be observed in the companies' activities.

However, the wallet hack was a serious personal loss. Blockchain investigator PeckShield tracked the movement of the stolen funds and reported that 3,248 ETH was initially withdrawn from a Ronin Bridge wallet that contained Zirlin's assets.

The ether was then split into different wallets and routed through Tornado Cash, a crypto mixer that hides the sources of transactions. The use of Tornado Cash signaled an intent to anonymize and cash out the proceeds of the theft, creating challenges for law enforcement recovery and tracking.

The incident occurred against the backdrop of a general decline in hacker activity. According to PeckShield, the number of documented hacks, scams and exploits in 2023 decreased by 28% compared to the same period last year. However, losses of $2.6 billion still occurred, highlighting the ongoing security gaps, especially with regard to DeFi protocols.

The practice of storing cryptocurrencies is still fraught with risks, even for industry veterans. But Zirlin showed resilience in response to personal adversity, tweeting his determination to continue despite the setback.

This experience highlights the ongoing threats in digital asset management and the potential damage from a single wallet vulnerability.