OKEx May Suspend Ethereum Classic Following 51% Attacks’ Losses

OKEx, which claimed over $1.7 billion of crypto trading volumes in the last 24 hours, warns that it could cease interactions with the Ethereum Classic (ETC) blockchain after the exchange lost around $5.6 million worth of cryptocurrencies. A wave of fear washed through the ETC community earlier this month following two successful 51 percent attacks on the original version of the Ethereum network.

According to OKEx, it detected a deep chain reorganization of the Ethereum Classic blockchain that included a double spend.

The Most Diverse Audience to Date at FMLS 2020 – Where Finance Meets Innovation

In a blog post published Saturday, the exchange said it made a full blockchain analysis alongside further examination into the addresses sending the double spend transactions, the history of sends/receives from the addresses, the block fields such as timestamp, and the subsequent movement of miner rewards from attack blocks. This effort has shed light on the threat actor or actors behind these attacks.

According to OKEx’s findings, the attacker(s) registered five accounts back in late June, which all then passed through its KYC protocols and thus increased their withdrawal limits. Later in the end of July, the new accounts deposited 68,230.02 ZEC onto OKEx in multiple transactions, then converted the full sum of ZEC deposits for ETC on the exchange’s spot market.

Suggested articles

Everything You Need to Know to Profit from the DeFi HypeGo to article >>

Next, the attacker(s) withdrew the newly purchased ETC from OKEx to multiple external ETC addresses, withdrawing a total of 807,260 ETC — worth approximately $5.6 million at the time when the Ethereum network came under attack.

OKEx to require longer confirmation times

“On July 31, after trading ZEC for ETC on OKEx and then withdrawing the ETC to external addresses, the attacker(s) began the 51% attack of Ethereum Classic’s blockchain in full. The whole operation can be broken into three stages: 1) the creation of a “shadow chain” or a secret, alternate chain to ETC’s mainnet, 2) the actual double-spend and 3) the deep chain reorganization that resulted in losses to OKEx,” the analysis shared with the community further reads.

The post asserts that an unknown perpetrator essentially rolled back and altered transactions on the network to initiate a shadow chain. The loss was fully borne by OKEx, according to its user-protection policy, and did not cause any loss to the platform’s users

OKEx, which describes itself as the world’s largest futures cryptocurrency exchange, says it is currently assessing the safety of re-enabling ETC transactions and will communicate with customers regarding updates to its support for Ethereum Classic. In response, it initially halted transactions in the crypto asset, but in the long term it will be requiring longer confirmation times to avoid being gamed while processing trades.

“In other proactive, immediate steps, OKEx has also blacklisted the addresses that the exchange identified as being used by the attacker(s). The exchange has also suspended the five accounts associated with the attack to prevent further incidents. In terms of more long-term responses, OKEx will continue to independently investigate the five accounts associated with the ETC attack,” the exchange concluded.