Cryptocurrency Exchange Gate.io Lost 54,200 ETC in a Hack

Jan 10, 2019 at 15:49 Update Date :Jan 10, 2019 at 15:49 UTC

The Ethereum Classic (ETC) attack is causing further loss to cryptocurrency exchange Gate.io. The crypto exchange has confirmed that it has lost around 40,000 ETC coins during the ongoing manipulation of the mission’s blockchain network. The total worth of these ETCs is around $220,000.

Also Read: Taiwan Police Arrested Crypto Miner For Stealing Electricity

The Ethereum Classic attack started last Sunday which is causing further loss to Gate.io. The exchange has noticed another double spend. Another transfer of 54,200 Ethereum Classic raises the internal balance of the cryptocurrency exchange which allowed the hackers to sell without depositing actual ETC in the exchange wallet by rolling back the transaction.

The exchange confirmed that the Ethereum Classic blockchain was under 51% attack. In the attack, a single entity took the control of more than half hash energy of the community which enables the entity to rewrite the transaction history and double spend cash.

Gate.io revealed that,

“It occurred between zero:40 Jan.7, 2019 and Jan four:20 Jan.7, 2019 UTC for about four hours. “All of the transactions have been confirmed usually on the ETC blockchain and have become invalid after the blockchain rollback.”

According to the CoinMarketCap.com, at the time of the hack, the Ethereum Classic to USD rate was between $4.9 and $5.25. Gate.io said that the censor of the exchange blocked the transactions of the attackers at the beginning and submitted the transactions to the manual exam. But during the 51% attack, all the transactions looked valid and confirmed well on the blockchain so the examiner passed these transactions. The exchange confirmed that because of the 51% attack it lost around 40k ETC. Gate.io also assured that it will take all the loss for the users. In a detailed report, the exchange said that,

“Gate.io has raised the ETC confirmation number to 500 and launched a new strict 51% detect for enhanced protection. However, we suggest the ETC dev team and the community build a new consensus mechanism (PoS for example) to better protect ETC network from 51% attack.”

Donald Mclntyre, the developer of Ethereum Classic admitted that they were looking at a textbook 51% and double spend attack. But the opinion was refuted by Cody Burns and another ETC developer. They said that there was more room for investigation. They promised that they will soon get the full picture of what actually happened. The team of ETC developers has also suggested that the exchanges should increase their block confirmation time to prevent such attacks.

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