Cryptocurrency exchange Coinbase suspended ETC trading, as the company’s experts detected “double spending” in Ethereum Classic blockchain network. ETC team confirmed the rumors about suspicious activity in its network, but suggested that this could result from dirty mining or test-run of new Linzhi ASIC miners. Linzhi top management, nevertheless, denies any involvement in the incident.
Coinbase has suspended all ETC transactions due to suspicious activity in the coin’s network, as the official tweet on the matter reads:
On 1/5/2019, Coinbase detected a deep chain reorganization of the Ethereum Classic blockchain that included a double spend. In order to protect customer funds, we immediately paused movements of these funds on the ETC blockchain. Read more here: https://t.co/vCx89dz44m
— Coinbase (@coinbase) January 7, 2019
As reported by Coinbase cybersecurity team, “a deep chain reorganization of the Ethereum Classic blockchain that included a double spend” was detected. Unidentified attackers managed to double spend 219 500 ETC roughly worth $1.1 million.
The trading platform keeps on reporting on the current situation with ETC.
Ethereum Classic team confirmed the hears about 51% attack and is currently investigating the situation. Though the exact cause of the incident is yet to be determined, ETC administration sticks to two main hypothesis on the matter. The first one presupposes that some mining pool could have managed to seize over 50% of the total network capacity. The second guess is that mining equipment manufacturer Linzhi is to be blamed, as the company could have begun testing its new ASIC miners.
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.
In time we will see. https://t.co/bbq6eqIoiS
— Ethereum Classic (@eth_classic) January 7, 2019
However, Linzhi director of operations Wolfgang Spraul denied these allegations:
“If we would test our ASICs, we would never do that on any mainnet, we would do that on a testnet or a private net. We would most likely invite independent industry figures like David Vorick or Anthony Lusardi to observe what we are doing,” – he wrote in an e-mail to CoinDesk.
ETC team, in turn, urged all the exchanges to increase block confirmation times:
As the situation develops we want to remind exchanges and pool operations to substantially increase block confirmation times (+400)
— Ethereum Classic (@eth_classic) January 8, 2019
Notably, in a tweet which is already removed the company admitted that the case has probably more to do with so-called sordid mining than with 51% attack.
Meanwhile, cryptocurrency exchange Kraken has also suspended ETC trading.
Ethereum Classic (ETC) funding has been disabled due to the ongoing 51% attack on the network. Funding will be resumed when the network's health has stabilized. Trading continues, for now. Follow the incident at https://t.co/Zsx36qQe5O
— Kraken Exchange (@krakenfx) January 8, 2019
Last month, blogger and blockchain expert Stepan Gershuni reported that Vertcoin network had fallen victim to 51% attack. Bitcoin Cash is at risk of suffering the same fate, given that earlier this month mining pool BTC.TOP got over 50% of the network’s hashrate under its control.