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OKEx could remove Ethereum Classic from its platform if it doesn’t update its security

August 15, 2020

ETC is being removed by OKEx after a 51% attack that cost the replacement $ 5.6 million.

According to a recent report released by OKEx The perpetrators registered five accounts between June 26 and July 9, 2020, and then deposited ZEC 68,230.02 (a deposit worth more than $ 5 million) on their platform.

July 31st The attackers exchanged their ZECs for 807,260 ETCs and withdrew the money from the exchange.

OKEx could remove Ethereum Classic from its platform if it doesn’t update its securityOKEx could remove Ethereum Classic from its platform if it doesn’t update its security

The on-chain process of the first 51% attack on August 1st

The chain process of the first 51% attack on August 1st. Source: Community Enthusiast

On the same day, The attackers began creating a “shadow chain” using the hash rate they received. At this point the shadow chain was identical to the main ETC chain, but this was somewhat unknown to the rest of the community. They then stored the ETC in OKEx and at the same time moved the same ETC in their shadow chain to their wallet addresses. effectively double spending on coins.

They exchanged their newly deposited ETC with OKEx for ZEC and withdrew the ZEC funds from the exchange. The perpetrators then sent their shadow chain to the network, which was already longer than the main chain.

According to the OKEx report The ETC community did not promptly report such issues:

“After seemingly inefficient communication with other participants in the large cryptocurrency community, including exchanges like OKEx, Wallets and ETC miners, the ETC community made the decision at this point to dismantle the now broadcast shadow chain as it was longer than the original one Backbone was. “

OKEx reimbursed its users for a total loss of $ 5.6 million after the attack. Since then, the exchange has temporarily suspended all deposit and withdrawal activities related to ETC and plans to extend the confirmation times for transactions in the affected chain.

The exchange said they can completely remove ETC from their platform unless the community takes appropriate action to improve network security and stability:

“The exchange will consider removing ETC from the list pending the results of the work of the Ethereum Classic community to improve the security of their chain.”

A heated debate erupted at an ETC community meeting yesterday on Charles Hoskinson’s proposal for a decentralized treasury. During the same meeting, Hoskinson mentioned that the company he currently runs IOHK developed a solution that would prevent a similar attack of 51% in the future.

During the meeting, many attendees expressed concern that the crypto asset could be removed from more exchanges if the community does not take appropriate steps to address the security issues they are currently facing.

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