Coinbase Halts Ethereum Classic Trading After 51% Attack

After Ethereum Classic (ETC) had over 100 blocks reorganized as a result of what is being called a 51% attack, the Coinbase cryptocurrency exchange decided to halt the coin’s activity.  It has temporarily suspended all withdrawals, deposits and any other transactions in order to prevent any further damage and to protect its users’ assets.

According to two different block explorers – Blockscout and Bitfly – the digital currency suffered an alleged 51% attack this past Sunday.  Coinbase adds in a blog post that it saw around 88,500 ETC (worth around $460,000 at the time) being double-spent.

Media outlet Coinness said yesterday that one of its own analysts discovered an abnormal hash rate being sent to a single ETC mining pool, which caused a massive amount of reorganization of mined blocks.  ETC supporters initially denied that any attack was occurring, but later acknowledged on Twitter, “We are working with Slow Mist and many others in the crypto community. We recommend exchanges and pool significantly increase confirmation times.”

Slow Mist is a security firm out of China.  It first informed users of the odd activity yesterday morning, adding that its team was trying to determine the source of the alleged attack.  Other reports, notably from Coinness, have asserted that there was a “certain abnormality” coming from the mining hash rate associated with a private ETC mining pool.

Blockscout and Bitfly report differing information regarding the duration of the attacks.  Blockscout says that the reorganization began at 02:00 UTC and ended at 05:00 UTC Monday morning, while Bitfly said that the attack was possibly still ongoing at 17:00 UTC.  Coinbase supported the Bitfly version.

Cody Burns, an ETC development advisor, told CoinDesk that the activity shouldn’t be labeled as a 51% attack but, rather, a “selfish mining attack” that was caused by a “client-local phenomenon.”  He later said in a Twitter post that “…the entire Ethereum network doesn’t ‘reorganize’ simultaneously. It would be more likely that someone discovered all of Coinbase ETC nodes and ‘surrounded’ them.”

Regardless of whether or not it was an intentional attack or a careless action, it still demonstrates a flaw in the network as it led to at least one individual being able to double-spend ETC.  This flaw isn’t limited to just ETC, as it has already been seen on a number of different crypto networks and is one of the major tasks most projects are now working to address.