Coinbase delays all Ethereum classic transactions after the two 51% attacks which ended up in hackers stealing millions of coins as we reported in the previous Ethereum Classic news.
The San Francisco-based exchange said that the confirmation time for ETC sent to Coinbase Pro and Coinbase is now set at 2 weeks after the recent network attack adding that they are monitoring the situation further. The decision came after the hacker stole more than $5 million worth of Ethereum Classic in two attacks by gaining control over the majority of the network performing a reorganization of the blockchain.
Given the recent network attacks on Ethereum Classic, we have increased the confirmation time for ETC sent to Coinbase & Coinbase Pro to ~2 weeks. We are actively monitoring the situation and will provide updates as they become available.
— Coinbase Support (@CoinbaseSupport) August 8, 2020
According to the investigation, the on-chain firm BitQuery said that the Ethereum Classic second 51% attack which saw hackers reorganizing over 4,236 blocks and double-spending $1.68 million worth of coins. The decision of Coinbase came after the second attack which was thought to be a software error at the time. The reports showed that the hackers managed to acquire a 2,800% return for his efforts spending 17.5 BTC worth $192,000 on renting hash power from Nicehash to perform the attack. In the meantime, Bitquery stated that the attack happened between July 31 and August 1 but the detection remained “for several days as a result of intricate planning and knowledge of the ethereum classic protocol”:
“The hacker began the attack by transferring ETC from an exchange wallet under its control, and then back again.”
In light of recent network attacks, it's recommended that all exchanges, mining pools, and other ETC service providers significantly raise confirmation times on all deposits and incoming transactions. @okex @binance @HuobiGlobal @hitbtc @coinbase @digifinex @etherchain_org
— Ethereum Classic (@eth_classic) August 6, 2020
Ethereum Classic labs which is the organization behind Ethereum Classic said that they hired the law firm Kobre & Kim to investigate and pursue the criminal charges against the attackers behind the attacks according to a press release. Coinbase delays all transactions as the report showed that eleven malicious transactions originated from one address and were inserted in the blockchain over the attack allowing 807,000 ETC to be double-spent. Bitquery added that the addresses may be hosted on either OKEx or one of the exchange’s affiliated companies but the platform hasn’t confirmed this yet.
How attacker stole 807,260 ETC ($5.6 million) during the 31st July Ethereum Classic ($ETC) 51% attack
— Bitquery.io ( Bloxy ) (@Bitquery_io) August 5, 2020
In the meantime, ETC Labs said that organizations can utilize several measures to prevent even bigger disruption to the network. ETC was hit with not one but two 51% attacks which were initially thought to be a software mistake or a simple blockchain reorganization but the hacker ended up gaining millions from the stolen coins.
While core developers, stakeholders, and contributors continue to monitor the network and investigate recent attacks we ask:
• Exchanges significantly increase confirmation times
• Use only Core #Geth by @etc_core or @Hyperledger Besu node clients
• Miners keep on mining! ⛏️
— Ethereum Classic (@eth_classic) August 7, 2020
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