Gate.io confirmed that Ethereum Classic was hacked using a 51 percent attack on the coin’s blockchain which resulted in a theft of more than $1 million worth of ETH so far.
The Researchers at the crypto exchange, Gate.io, confirmed that the attack was successful. The exchange had prepared an in-depth analysis of their findings which was published on January 8.
The Gate.io Research published its analysis on its platform in which it claimed that it had detected seven rollback transactions, out of which four were apparently done by the hackers, in the process transferring a total of 54,200 ETC (worth $271,500).
In its analysis report, the Gate.io stated that the attack happened over 4 hours on January 7th between 0:40 and 4:20 UTC. It also mentioned that during such time the transactions were confirmed in a normal way on the blockchain and then subsequently invalidated after the damaging network rollback. It also provided the details of the three ETC addresses used by the attacker.
As quoted by Gate.io “Four rollback transactions transferred 54,200 ETC in total. It happened between 0:40 Jan 7, 2019, and 4:20 Jan 7, 2019, UTC for about 4 hours. All the transactions were confirmed normally on the ETC blockchain and became invalid after the blockchain rollback.”
Gate.io stated it would compensate its users for the losses and stating “Gate.io will take all the loss for the users.” Gate.io will take all the loss for the users.
It further added “Importantly, the exchange said that it has identified three of the attacker’s ETC accounts:
Gate.io continues to explain: “Gate.io’s censor successfully blocked [the] attacker’s transactions at the beginning and submitted them to [a] manual exam. Unfortunately, during the 51% attack, all the transactions looked valid and confirmed well on the blockchain. The examiner passed the transactions. It caused about 40k ETC loss due to this attack.”
The exchange added that it has increased its ETC transaction confirmation number to 500 and have launched a more vigorous 51 percent detection security mechanism. It alerted the other exchanges with regards to the above addresses and advised them to block the transactions from the identified addresses.
The Chinese blockchain security firm, Slow Mist, also reported the attack on January 9 and confirmed the details as published by Gate.io in its analysis report
Due to this attack, the trading of ETC tokens was stopped by many of the big cryptocurrency exchanges. For instances, Coinbase made a sudden announcement on Monday evening that it was temporarily disabling all receipts and transfers of ETC, while the user shall still be able to buy and sell the digital asset.
Later Coinbase via a blog post said, “The Coinbase team is currently evaluating the safety of re-enabling sends and receives of Ethereum Classic and will communicate to our customers what to expect regarding support for ETC.”
This was followed by Kraken exchange, which sent an update to its customers informing about the “51% attack.” And levying a temporary suspension of all deposits and withdrawals of the asset till the time the issue could be resolved.
OKEx, however, did not put any such restrictions and informed its users through an announcement on its website that “it would continue the ETC based transactions in a normal way in spite of the “51% attack” and stated that “Our team have assessed the situation and our advanced risk management system can maintain market order. Our ETC trading, depositing, and withdrawal will remain open and continue normal operations.”