Mixin Network, a prominent Web3 company, has reported a colossal exploit that has resulted in a staggering $200 million (approximately Rs. 1,662 crore) loss from its platform. Renowned for its decentralized wallet services, Mixin Network was founded in 2017 and boasted a total value secured exceeding a billion dollars. However, a devastating breach occurred over the weekend, with hackers infiltrating Mixin Network's cloud service database and causing a multi-million-dollar setback. The platform has promptly engaged the services of the cybersecurity firm SlowMist to investigate this critical incident.

Feng Xiaodong, the visionary founder behind Mixin Network, publicly addressed the incident on September 24 via a live stream, assuring the community that potential solutions are actively under consideration.

In the wake of this security breach, Mixin Network has officially acknowledged the incident through its official X handle.

[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

"The database of Mixin Network's cloud service provider was attacked by hackers, resulting in the loss of some assets on the mainnet. We will try our best to minimize the losses and deeply apologize for this," the statement reads.

As a precautionary measure, Mixin Network has temporarily suspended all deposit and withdrawal services until further notice.

This exploit has taken a substantial toll on the platform's treasury, significantly impacting the top 100 assets on Mixin Network, which previously exceeded $1.1 billion (approximately Rs. 9,145 crore), as reported by CoinDesk.

In response to this news of the security breach, the native XIN token of the platform experienced an eight percent decline in value. According to CoinMarketCap, XIN is currently trading at $194 (approximately Rs. 16,130).

Regrettably, this incident is not the first instance of a centralized server belonging to a blockchain firm falling victim to cybercriminals.

In a report published last year, blockchain research firm CertiK highlighted the inherent risks associated with centralization, emphasizing that it contradicts the principles of DeFi (Decentralized Finance) and exposes systems to significant security vulnerabilities. It underscored the potential for dedicated hackers and malicious insiders to exploit single points of failure.

Researchers have previously pointed out that segments of the cryptocurrency space, such as the DeFi sector, are likely to become more secure as workloads transition from traditional servers to blockchain networks.

In a disconcerting trend, the first half of 2023 witnessed crypto scams, hacks, and rug pulls amassing a staggering $656 million (approximately Rs. 5,454 crore) in ill-gotten gains, as reported by the Web 3.0 security firm Beosin in July.