Author: Nancy, PANews
On September 4, the crypto gambling platform Stake.com was hacked, and the loss may be as high as 41.3 million US dollars. Stake.com did not disclose the exact amount of the theft, but only stated that user funds are safe and all services have been restored.
While the large-scale hacker attack shocked the crypto community, the outside world is curious about the asset reserve strength of Stake.com. How can Stake.com completely cover the loss of this theft in the short term? What is the real income of this on-chain gambling leader?
A total of more than $41 million was stolen, and all services were restored just five hours later
Last night (September 4), blockchain security agency PeckShield issued a statement saying that the crypto gambling platform Stake.com was suspected of being attacked. According to ZachXBT, the loss was about $15.7 million (including 6,000 ETH, 3.9 million USDT, 1.1 million USDC and 900,000 DAI). Subsequently, the chain detective ZachXBT sent another message saying that Stake.com had transferred another $25.6 million on the BSC and Polygon chains, bringing the total amount of theft to $41.3 million.
According to Yu Xian, the founder of SlowMist, the theft of Stake.com was related to a problem with the private key. It may not necessarily be that the private key was stolen, but it may be that the interface/service related to the private key was maliciously exploited.
However, Stake.com's official response to the theft seems to be particularly calm, only stating that it confirmed that unauthorized transactions had occurred in the ETH/BSC hot wallet, and did not give a detailed explanation of the theft. However, the platform stated that user funds are safe, and BTC, LTC, XRP, EOS, TRX and all other wallets are still fully operational.
At the same time, Stake.com co-founder Ed Craven also tweeted, "For these reasons (theft), Stake will reserve a portion of cryptocurrency in hot wallets at any time in case of emergency. All affected wallets should be able to resume operation soon." At the same time, Stake.com co-founder Bijan Tehrani also said, "We will share as much information as possible when we can."
Just about five hours later, Stake.com announced that all services had been restored and deposits and withdrawals for all currencies had been reopened.
Annual revenue exceeds $2.6 billion, accounting for 5.9% of all Bitcoin transactions
Stake.com is the world's seventh largest gambling website located in Melbourne, Australia, with 600,000 regular users and 6 million registered accounts, most of which come from the "grey" areas of Brazil, Japan and other Southeast Asian countries. According to data from consulting firm Regulus Partners, its annual revenue in 2022 alone is close to US$2.6 billion, about twice the total revenue in 2021 and nearly 26 times that in 2020, surpassing well-known gambling platforms such as DraftKings and 888.
Stake.com revenue changes between 2019 and 2022
According to Dune data, since August 2022, Stake.com has accumulated customer deposits of more than US$2.16 billion and has more than 429,000 total users.
It is worth mentioning that according to Ed Craven’s tweet, as of December 2022, Stake.com accounted for 5.9% of all Bitcoin transactions, 12.3% of Dogecoin transactions, and 15.1% of Litecoin transactions.
Stake.com's revenue of $2.6 billion far exceeds that of many crypto platforms, such as Circle's 2022 annual revenue of $150 million, BitDeer's 2022 net income of more than $333 million, and MakerDAO's 2022 fiscal year total revenue of $65 million. It is even far ahead of Rollbit, a similar gambling platform that has recently become popular, with a revenue of $350 million in 2022. Judging from these published data, Stake.com is enough to cover the stolen funds.
Stake.com's huge profits are inseparable from the leadership of Ed Craven and Bijan Tehrani. Among them, Ed Craven is also one of the youngest self-made billionaires in the world. He was ranked fifth on the 2022 Australian Financial Review Young Rich List with a net worth of US$1.1 billion. He also made headlines for spending more than A$120 million to buy two Toorak mansions.
According to the Financial Times, Ed Craven and Bijan Tehrani met through the game RuneScape and co-founded Primedice, the first online gambling website similar to Satoshi Dice, in 2013, allowing players to bet using cryptocurrencies. According to the two, the price of Bitcoin was less than $20 at the time, and the unexpected returns from early crypto investments also provided ample funds for their business.
Then in 2017, Ed Craven and Bijan Tehrani founded Stake.com, which mainly provides online casino games and sports betting services, supporting players to bet through cryptocurrencies such as Bitcoin, Ethereum, Dogecoin, Litecoin and Bitcoin Cash.
"Large amounts of marketing spend are critical for a platform that mixes cryptocurrency and gambling businesses and will help build user trust, especially in the face of some very strong competitors." To this end, Stake.com has invested heavily in advertising. For example, in addition to being a sponsor of British football clubs Everton FC, Watford Football Club, Everton Football Club and other sponsors, Stake.com has also signed a $100 million annual endorsement agreement with Canadian rapper Drake and reached a cooperation with the mixed martial arts organization UFC.
Canadian rapper Drake and Stake.com
Regarding the success of Stake.com, Nigel Eccles, founder of the gambling company FanDuel, believes that Stake.com's success is attributed to its active marketing and becoming "the first truly global gambling site that accepts cryptocurrencies."
In the view of Ingo Fiedler, co-founder of Blockchain Research Lab, the platform may be largely due to the fact that cryptocurrencies and gambling are "natural allies" that attract customers willing to take risks. "Day traders who use cryptocurrencies for speculation are a group very similar to typical gamblers, and the downturn in the cryptocurrency market after last year's big crash may also prompt more traders to turn to gambling platforms."