54,200 Ethereum Classic Stolen from Crypto Exchange Gate.io

by | Jan 11, 2019 | Blockchain, Cryptocurrency, Cryptocurrency News

Ethereum Classic | ECH | Gate.io | Hack | 51% Attack

The year started off on a bad note for Ethereum Classic (ETC) as it experienced a 51% attack. Following which Cryptocurrency exchange Gate.io confirms the loss of 40,000 ETC, amounting to about $220,000.

The exchange released in a blog post on Tuesday that ETC was under a  51% attack, i.e a single entity takes control of more than half the network’s hash power and rewrites its transaction history and double-spend coins. Three accounts of the attacker(s) were identified.

“It happened between 0:40 Jan.7, 2019 and Jan 4:20 Jan.7, 2019 UTC for about 4 hours. All the transactions were confirmed normally on the ETC blockchain and became invalid after the blockchain rollback.”

The ETC/USD rate was fluctuating between $4.90 and $5.25 at the time of the transfers, as per the details available on CoinMarketCap.com. Gate.io. explained:

“Gate.io’s censor successfully blocked attacker’s transactions at the beginning and submitted them to the manual exam. Unfortunately, during the 51% attack, all the transactions looked valid and confirmed well on the blockchain. The examiner passed the transactions. It caused about 40k ETC loss due to this attack. Gate.io will take all the loss for the users.”

Theft of $1 Million Reported

The  51% attack news was first released by Coinbase, the US crypto exchange. The exchange also released today that the attackers were still exploiting the Ethereum Classic network and had siphoned-off 219,500 ETC coins worth over a million dollars. An Ethereum Classic blockchain explorer, Blockscout confirmed reorganization attacks between block numbers 7261495 and 7261496. As per their data, a transaction containing 26,000 ETC was first spent during the mining of block number 7261492; the same transaction was again noted on block number 7261497. While all the exchanges who listed ETC have discontinued their ETC deposits and withdrawals but none of them except Gate.io have reported any losses. The discontinuation is done in order to push the attackers holding all the stolen ETC with no options to liquidate them for fiat. Ideally,  it should lead to a flat price action before the Ethereum Classic team comes up with a solution to entirely repeal the attack.

Ethereum Classic Responds

Donald McIntyre, the developer of Ethereum Classic admitted that they are looking at a textbook 51% and double spend attack. While Cody Burns, another fellow ETC developer doesn’t fully agree and believes that there is more room for investigation. The ETC group stated in an official response

“To be clear we are making no attempt to hide or downplay recent events. Facts are facts and as the situation develops we’ll soon get a full picture of what actually took place. Linzhi is testing ASICS. Coinbase reported double spends; both may be true.”

The team subsequently raised its prevention tactics by asking exchanges to increase their block confirmation times.

Read more: BitTorrent Token (BTT) Will Spark Blockchain Mass Adoption, Says TRON CEO Justin Sun

Arshmeet Hora

The idea of expressing one’s views and reviews through words is beyond intriguing. What started as a creative let out has now become a passion and a profession for Arshmeet K Hora. In her own words ” with every word, every article that I write, my passion towards this medium has grown stronger.”  Arshmeet covers latest crypto news and updates as well as what happening new revolving around Blockchain Technology.

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