Gate.io Confirms $200K in Ethereum Classic Lost; Blockchain Attacks Continue

globalcoinreport.com

Crypto exchange Gate.io has stated on Thursday that it is set to absorb the loss of about $200,000 worth of Ethereum Classic (around 40,000 ETC) in the wake of a string of Blockchain history rewrites that are still happening.

According to a January 8 blog post, the crypto exchange confirms it has experienced the 51 percent attack and identified three addresses, which according to them are linked to an attacker. The attack has occurred when an entity that holds sufficient computing power is able to modify the network’s transaction history and double-spend coins.

In a statement, the company says:

“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.”

Based on CoinMarketCap data, ETC’s price is now at $5.04 per token, as of press time.

The statement corroborates identical claims conveyed by San Francisco-based crypto exchange Coinbase, which declared on Monday that it has spotted the occurrence of double spends as a result of deep block reorganizations (reorgs) on the Ethereum Classic Blockchain.

Based on information coming from Bitfly (Etherchain), Coinbase, and Blockscout, the attacks are still ongoing. A Coinbase representative says:

 “We updated our blog last night with additional attacks. We won’t resume ETC sends/receives until we feel that it’s safe to do so.”

Meanwhile, Peter Pratscher, the CEO of Bitfly, points out that while several reorganized blocks can be confirmed on the ETC network, they have to determine the movement of the transactions to issue a definite confirmation or denial on the double spends.

For his part, Andrew Cravenho, project lead at Blockscout, says that proof of a double spend attack is “100 percent.”

Cravenho cites the reorg that transpired between block number 7261495 and 7261496 on the Ethereum Classic blockchain, adding that 26,000 ETC are spent once prior to the reorganization on block number 7261492 and a repeat on block number 7261497.

He says that this double spend transaction has been stolen. Cravenho further states that while it is possible that an accident may have caused the event brought about by a specialized mining hardware testing as indicated on the Ethereum Classic’s official Twitter page, this possibility is highly unlikely.

Cravenho jibes that if he will be testing new hardware, he will not test $100,000 in one single swoop.

A number of developers in the Ethereum Classic community have openly agreed with the Blockscout’s analysis. Developer Donald McIntyre even says that he has heard that there is no attack by any ASICs provider. On the other hand, not all Ethereum Classic developers agree.

Cody Burns, an Ethereum classic developer, claims that what exactly is happening on the Ethereum Classic network is yet to be unraveled. He also refuses to comment when inquired about what caused these reorganization attacks.

With regards to steps that will ensure the security of the network, Burns says that developers are now trying to move with caution, adding that they are now discussing ways to mitigate the current threat.

Meanwhile, McIntyre suggests that tentative steps be taken to determine whether an urgent PoW algorithm change on ETC is needed.