'$1.1 million Ethereum Classic stolen in attack'

An 51% Attack on the Ethereum Classic (ETC) blockchain has allowed the attacker to double spend at least 219.5 thousand ETC. That's equal to over 1.1 million dollars. The attack was uncovered by Coinbase on January 5th and made public on January 7th.

A 51% attack is a situation in which one attacker gets 51% of the processing power in a blockchain network. This allows the attacker to get the upper hand in all decision making in the network. This also means the attacker can create coins out of thin air, hence the description: 'double spending'. The receiver of an actual transaction will never receive it, because the attacker basically creates a new recipient.

The ETC development team doesn't deny the attack, but hasn't made its final conclusions yet. During the attack ASIC mining hardware manufacturer Linzhi has been testing new EtHash mining machines. These machines produce 1400 M/h of hash power.

The ETC team believes it's likely this wasn't an attack, but a test from the hardware manufacturer, who dumped the blocks after mining them. Double spends have not been detected by the team.

However, Coinbase did notice double spending on ETC coins. It's what alerted the Coinbase team Saturday evening in the first place. The engineers of the trading platforms confirmed the double spending event, and decided to halt all trading on Ethereum Classic with immediate effect. At the time of writing ETC trading is still 'under maintenance'.

Coinbase has made its conclusion, and is currently waiting for the situation to pass-by and re-enable trading on their platform. The Ethereum Classic development team is still investigating. They expressed frustration with Coinbase, as they have published statements without talking to the ETC development team. They want exchanges and pool operations to increase the block confirmation times in order the prevent spending of newly mined coins.

If this truly is a 51% Attack, it's the first major hit for one of the top currencies this year. The price of ETC went down 7% in the past 24 hours, while the rest of the market is seeing 1~2 percent corrections. However, in the past year there have been plenty of attacks on blockchain networks.

Bitcoin Private got hacked during the summer of 2018 when it forked from the Bitcoin blockchain. However, nobody noticed the hack until months later. In October last year security firm Group IB published a report that suggested that hackers stole at least 19.5 million dollars with 51% Attacks in 2018. The hack on Bitcoin Gold was the biggest, at 18 million dollars was stolen. As a result, BTG was removed from a number of exchanges.