Drake-Backed Crypto Casino Stake Loses $40M in 'Unauthorized' Transfers

Popular crypto betting platform Stake has been exploited, losing around $40 million in funds, blockchain security experts said today. 

The gambling firm, which is backed by rapper Drake, experienced multiple unusual transactions Monday morning Eastern Time with around $16 million in Ethereum, Tether, USD Coin and DAI leaving the platform, Web3 security firm Cyvers first said on Twitter. Another $25 million was drained on Binance Smart Chain and Polygon, according to pseudonymous crypto sleuth ZachXBT.

Blockchain security firm Peckshield told Decrypt that the transfers looked “suspicious” if the platform was not under maintenance. Hours later, Stake confirmed the wallet transfers were "unauthorized," meaning someone gained access to the company's wallet and moved the funds.

"Three hours ago, unauthorised [transactions] were made from Stake’s ETH/BSC hot wallets. We are investigating and will get the wallets up as soon as they’re completely re-secured," the company tweeted. "User funds are safe," it added. A “hot wallet” is a digital asset wallet connected to the internet. Such wallets are vulnerable to hacks and other exploits.

Stake, which allows users to bet on sports games and play casino games with cryptocurrencies, did not immediately reply to Decrypt’s request for comment.

Billionaire Stake founder Ed Craven wrote on Twitter that “Stake keeps a small portion of its crypto reserves in hot wallets at any given moment for these very reasons” and that “all affected wallets should be operational shortly.”

Cyvers posted on Twitter an address which had received the crypto. It noted that the stablecoins which had left Stake were then converted into Ethereum, the second biggest digital asset. 

MetaMask Lead Product Manager and security expert Taylor Monahan noted on Twitter that the "Stake hackers [are] looking quite methodical," posting a visual of the wallet transfers from the suspected hackers so far.

Stake was launched in 2017 by Australian billionaire Ed Craven. It is endorsed by a number of celebrities, most notably Drake. The rapper signed a $100 million a year endorsement deal with Stake in 2022, according to the Financial Times. 

The newspaper reported gross gaming revenues last year of $2.6 billion, citing company accounts, making Stake one the world’s largest gambling companies.

Editor's note: This article was updated after publication to include comments from Stake via Twitter and additional details regarding the exploit as they developed.