A Leading Cryptocurrency Exchange Halts Ethereum Classic Trading After Double Spend Attacks
Overview
A prominent cryptocurrency exchange has been forced to suspend trading of Ethereum Classic (ETC) following the discovery of double spend attacks totaling over $1 million. San Francisco-based Coinbase identified the suspicious activity on January 5, uncovering a significant chain reorganization on the Ethereum Classic blockchain that included multiple instances of double spending.
Double Spend Attacks
Double spend attacks, also known as “51% attacks,” occur when an individual or entity gains control of more than 50% of a blockchain’s hashrate. This control allows them to reverse transactions and re-spend their cryptocurrency, raising concerns about the network’s integrity. In this case, the attacker managed to execute 12 double spends, resulting in the loss of 219,500 ETC, equivalent to $1.1 million.
Response and Impact
Upon detecting the reorganization and double spend attacks, Coinbase took immediate action to protect customer funds by halting send/receive activity on the Ethereum Classic blockchain. While ETC buy and sell activities were unaffected, the suspension of sends and receives remained in place as the exchange continued to monitor the situation. The value of ETC experienced a sharp decline in response to the attacks, although it has since begun to recover.
Future Outlook
The Coinbase team is currently assessing the security risks associated with re-enabling sends and receives for Ethereum Classic. Customers will be informed of any updates regarding the support for ETC trading on the platform. Double spend attacks are not uncommon in the cryptocurrency space, with previous incidents leading to the delisting of certain currencies from exchanges.
Research has shown that hackers could potentially execute a double spend attack on a $2 billion network like ETC with just a $1.5 million investment, potentially resulting in over $1 billion in profit. As the cryptocurrency landscape continues to evolve, exchanges and investors must remain vigilant against such threats.
Overall, the recent double spend attacks on Ethereum Classic serve as a reminder of the importance of robust security measures in safeguarding digital assets against malicious actors in the ever-changing world of cryptocurrency.