A Major Cryptocurrency Exchange Delists Bitcoin Gold After Cyber-Attack
A major cryptocurrency exchange has made the decision to delist Bitcoin Gold (BTG) after the project refused to pay $250,000 to cover losses resulting from a significant cyber-attack earlier this year.
The Cyber-Attack on Bitcoin Gold
In May, an attacker allegedly rented servers from the cloud mining marketplace NiceHash to carry out a 51% attack on BTG. This attack allowed the hacker to take control of the blockchain and execute a “double spend” attack.
During the double spend attack, the hackers sent BTG tokens to various exchanges, traded them for other coins, cashed out, and then returned the original BTG tokens to their wallet. This manipulation was possible due to the temporary control the attackers had over the blockchain.
It is estimated that the hackers managed to steal around $18 million in BTG based on the prices at the time of the attack.
Bitcoin Gold’s Response
Bitcoin Gold refused to pay half of Bittrex’s losses as demanded, arguing that they had already taken necessary precautions to warn exchanges about potential double spend attacks. The project claims to have provided the attacker’s wallet address, advised exchanges to increase confirmation requirements, and recommended flagging and reviewing unusually large deposits.
Despite Bitcoin Gold’s efforts to prevent further attacks, Bittrex fell victim to the largest double-spend attack conducted by the hackers. The attackers deposited 12,371 BTG from the identified wallet, traded them for other coins, and then used the 51% attack to double-spend the BTG, rendering the original deposit invalid.
Bitcoin Gold stated, “We feel it’s clear that we took every reasonable step to try to help ensure Bittrex’s safety against this threat.”
Implications of the Cyber-Attack
While no customer funds were directly impacted in this incident, it serves as a reminder of the vulnerabilities present in digital currency systems. The cyber-attack on Bitcoin Gold highlights the risks associated with using cryptocurrencies and the importance of implementing robust security measures to safeguard against malicious activities.