Gate.io Confirms ETC Suffered 51% Attack

Cryptocurrency exchange Gate.io’s researchers have confirmed that a 51% Attack took place on the ETC (Ethereum Classic) network. The researchers also published the analysis of ETC related transactions that occurred on the cryptocurrency exchange’s platform during the attack.

Findings of Gate.io’s Analysis

According to the analysis, seven separate rollback transactions had been detected, four of which were allegedly carried out by the 51% attacker. A total of 54,200 ETC were transferred during the attack. That amounts to about $271,500.

Gate.io stated that the attack lasted for four hours from 0:40 UTC to 4:20 UTC on January 7, 2019. During this time, transactions were normally confirmed on ETC’s Blockchain and then invalidated after the rollback.

Gate.io gave the details of three Ethereum Classic addresses which they believe the attacker used. The company also issued a statement that it was successfully able block the attacker’s transactions and then submitted the transaction details for a manual exam.

Unfortunately, all the transactions appeared valid and were also confirmed on the Blockchain. The company stated that the examiner passed all the transactions, which led to about 40,000 ETC being lost during the attack.

The company stated that it would compensate all users for the losses they suffered during the attack. It also advised other cryptocurrency exchanges to block all transactions that stemmed from addresses Gate.io’s researchers identified as being used by the attacker.

Gate.io said that it had increased its Ethereum Classic transaction number to 500 and has also launched a stronger 51% Attack detection mechanism.

Suspension of ETC Trading

Several major cryptocurrency exchanges such as Coinbase, bitFlyer, Poloniex and Coincheck had already temporarily suspended withdrawals and deposits for Ethereum Classic as soon as word of the attack got out on January 5.

Coinbase was the first to report unusual activity on ETC’s Blockchain, highlighting increased hash rates which indicated a possible 51% Attack. The crypto exchange also published its findings that there were cases of double spending as well as chain reorganizations (reorgs).

The Ethereum Classic core team initially refuted that a 51% Attack had occurred, and insisted that there had been no double spends or reorgs on their network. The team stated that the unusual activity was probably due to “selfish mining” and blamed the mining hardware manufacturer Linzhi for testing their new 1,400/Mh ethash mining equipment on the ETC Blockchain.

Linzhi immediately issued an emphatic statement that they would never test their products on a live network.