Author: Nancy, PANews
On September 4th, the encrypted gambling platform Stake.com was hit by a hacker attack, with losses potentially reaching as high as $41.3 million. However, Stake.com did not disclose the exact amount stolen, only stating that user funds are secure and all services have been restored.
The massive hacker attack has shocked the crypto community, and there is curiosity from the outside world about Stake.com's asset reserve strength. How was Stake.com able to fully cover the stolen losses in a short period of time? What is the true income situation of this leading on-chain gambling platform?
Over $41 million stolen, all services restored within five hours
Last night (September 4th), blockchain security firm PeckShield reported that the encrypted gambling platform Stake.com was suspected to have been attacked. According to ZachXBT, the losses were approximately $15.7 million (including 6,000 ETH, 3.9 million USDT, 1.1 million USDC, and 900,000 DAI). Subsequently, blockchain detective ZachXBT reported that Stake.com had another $25.6 million transferred on the BSC and Polygon chains, bringing the total stolen amount to $41.3 million.
According to SlowMist founder Yu Xian, the theft at Stake.com is related to issues with the private key, which may not necessarily mean the private key was stolen, but could also involve the malicious exploitation of interfaces/services related to the private key.
However, Stake.com's official response to the theft incident seems particularly calm, only stating that unauthorized transactions occurred in the ETH/BSC hot wallet without providing a detailed explanation of the theft. The platform did emphasize that user funds are secure, and that BTC, LTC, XRP, EOS, TRX, and all other wallets are still operating normally.
At the same time, Stake.com co-founder Ed Craven also tweeted, "For these reasons, Stake always reserves a portion of cryptocurrency in the hot wallet for emergencies at any time. All affected wallets should be able to resume operations soon." Additionally, Stake.com co-founder Bijan Tehrani stated, "We will share more information as soon as we can."
Just about five hours later, Stake.com announced that all services had been restored and that deposits and withdrawals for all currencies were reopened.
Annual revenue exceeds $2.6 billion, once accounted for 5.9% of total Bitcoin trading volume
Stake.com is the seventh largest gambling website globally, based in Melbourne, Australia, with 600,000 regular users and 6 million registered accounts, mostly from "gray" areas in Brazil, Japan, and other Southeast Asian countries. According to consulting firm Regulus Partners, its annual revenue in 2022 alone was close to $2.6 billion, about twice the total revenue in 2021 and nearly 26 times that of 2020, surpassing well-known gambling platforms such as DraftKings and 888.
Revenue changes for Stake.com from 2019 to 2022
According to Dune data, since August 2022, Stake.com has accumulated customer deposits exceeding $2.16 billion, with a total of over 429,000 users.
It is worth mentioning that, according to Ed Craven's tweet, as of December 2022, Stake.com accounted for 5.9% of total Bitcoin trading volume, 12.3% of Dogecoin trading volume, and 15.1% of Litecoin trading volume.
Stake.com's substantial income far exceeds many other crypto platforms, such as Circle with a full-year revenue of $150 million in 2022, Bitdeer with a net income of over $333 million in 2022, and MakerDAO with a total revenue of $65 million in the 2022 fiscal year, and even significantly surpasses the 2022 revenue of the recently popular similar gambling platform Rollbit at $350 million. Based on these disclosed data, Stake.com is more than capable of covering the stolen funds.
The enormous profits of Stake.com are attributed to the leadership of Ed Craven and Bijan Tehrani. Ed Craven, in particular, is one of the world's youngest self-made billionaires, with a net worth of $1.1 billion, ranking fifth on the 2022 Australian Financial Review Young Rich List, and previously making headlines for purchasing two Toorak mansions for over $120 million Australian dollars.
According to the Financial Times, Ed Craven and Bijan Tehrani met through the game RuneScape and co-founded the first online gambling site similar to Bitcoin's Satoshi Dice, called Primedice, in 2013, allowing players to place bets using cryptocurrencies. According to the two, at that time, the price of Bitcoin was less than $20, and the unexpected returns from early crypto investments provided ample funding for their business.
In 2017, Ed Craven and Bijan Tehrani established Stake.com, primarily offering online casino games and sports betting services, supporting players to place bets using cryptocurrencies such as Bitcoin, Ethereum, Dogecoin, Litecoin, and Bitcoin Cash.
"Substantial marketing expenditure is crucial for a platform that combines cryptocurrency and gambling, which will help build user trust, especially in the face of very strong competitors." For this reason, Stake.com has invested heavily in advertising, such as being sponsors of English football clubs Everton FC, Watford FC, and Everton FC, signing a $100 million annual endorsement agreement with Canadian rapper Drake, and partnering with the UFC.
Canadian rapper Drake with Stake.com
Regarding Stake.com's success, Nigel Eccles, the founder of gambling company FanDuel, believes that Stake.com's success is attributed to its aggressive marketing and becoming "the first truly global, cryptocurrency-accepting gambling website."
In the view of Ingo Fiedler, co-founder of the Blockchain Research Lab, the platform's success is largely due to the natural alliance between cryptocurrency and gambling, both of which attract adventurous customers. "Day traders who use cryptocurrencies for speculation are a very similar group to typical gamblers, and the downturn in the cryptocurrency market after last year's crash may have prompted more traders to turn to gambling platforms."
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