ETC is facing being delisted from OKEx following a 51% attack that cost the exchange $ 5.6 million.
According to a recently published report by OKEx, the perpetrators registered five accounts between June 26 and July 9, 2020, then send 68,230.02 ZEC (worth more than $ 5 million) on their platform.
On July 31, the attackers swapped their holding ZEC for 807,260 ETC and pulled it out of the exchange.
The on-chain process of the initial 51% attack on August 1. Source: bitquery
The same day, the attackers began to create a “shadow chain” using their newly obtained hashrate. At this point, the ball chain is similar to the main ETC chain but is unknown to the rest of the community. They then send ETC on OKEx, simultaneously transferring the same ETC number on their shadow chain to the wallet addresses they control – effectively double-spending the coins.
They traded their newly deposited ETC to ZEC on OKEx and pulled ZEC from the exchange.
Then they broadcast the ball online, which was longer than the main chain.
ZEC withdrew from OKEx to multiple addresses by the attacker(s). Source: OKEx
As reported by OKEx, the issues were not promptly notified by the ETC community:
“After what appeared to be inefficient communication with other participants in the larger crypto community — including exchanges like OKEx, wallets and ETC miners — the ETC community at this point made the decision to move to mine the now-broadcasted shadow chain, given that it was longer than the original mainnet.”
OKEx refunded users after the attack, having suffered a full loss of $ 5.6 million. Since then, it has temporarily suspended all ETC deposits and withdrawals and plans to extend confirmation times for troubled on-chain transactions.
The exchange has said that they can delist ETC entirely unless the community takes steps to improve the network’s security and stability:
“The exchange will consider delisting ETC, pending the results of the Ethereum Classic community’s work to improve the security of its chain.”
At an ETC community meeting yesterday, a heated debate arose over Charles Hoskinson’s proposal for a decentralized treasury. In the same meeting, Hoskinson mentioned that the company he currently runs, IOHK, developed a solution that could prevent a similar 51% attack in the future.
At the meeting, many attendees expressed concern that there would be more exchange delistings if the community fails to take important steps to address current security issues.
Despite this latest 51% attack, the ETC price is still trading slightly up at its current price of $ 6.96, despite seeing a sharp drop from the 1/8 high of close to $ 8.3. Its market cap is currently $ 809 million, and the past 24-hour trading volume is $ 668 million.
Source: TradingView
Macro investor Dan Tapiero – founder of Gold Bullion Int. recently became a Bitcoin bull,
asked on August 5 why ETC has no zero value following recent hacks:
“Why isn’t ETC worth zero? It has an $800mm market cap. Why own something that can be easily attacked and stolen when there are so many alternatives (even within alts space). Digital currency is supposed to be secure. What am I missing here?”
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