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Mixin Network, a decentralized cross-chain transfer protocol based in Hong Kong, is facing scrutiny following the revelation of a $200 million hack.
On September 23, hackers compromised the database of Mixin’s cloud service provider, leading to the loss of $200 million in assets on its mainnet. As a result, deposit and withdrawal services were promptly halted on the protocol. Nevertheless, developers indicated that transfers would remain unaffected while the investigation is ongoing.
In a statement on September 25, Zhuoer Jiang, CEO of the Bitcoin mining pool BTC.TOP, asserted that Bitcoin (BTC) held within the Mixin protocol “should have never been stolen in the first place.” Jiang noted that Mixin’s Bitcoin would generally have been “stored in cold storage” and thus remained secure from the cloud server breach that impacted Mixin’s hot wallets. In its most recent monthly report from July, Mixin revealed that a total of 9,544 BTC, valued at approximately $253 million, was held in its protocol.
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During a live update on September 25, Mixin founder Xiaodong Feng stated that Bitcoin was “the primary asset” taken and that developers would reimburse users “up to a maximum of 50%” for the lost assets. Feng explained that the remaining amount would be allocated to users as “tokenized liability claims” that Mixin would eventually buy back “with its future profits.”
Established in 2017, Mixin had nearly $400 million across 48 chains secured in its protocol prior to the incident, according to data from DefiLlama. The protocol enables users to transfer digital assets to others using phone numbers. Xiaolai Li, a Chinese billionaire and early Bitcoin supporter, is among the initial angel investors in the company.
[Announcement] In the early morning of September 23, 2023 Hong Kong time, the database of Mixin Network’s cloud service provider was attacked by hackers, resulting in the loss of some assets on the mainnet. We have contacted Google and blockchain security company @SlowMist_Team…
— Mixin Kernel (@MixinKernel) September 25, 2023
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