A series of attacks have been detected on the popular crypto exchange Coinbase which led to the suspension of all transactions of Ethereum Classic. The transactions are suspended on Coinbase’s trading platforms, products and services. The incident resulted in the loss of $1.1 million in ETC, and it also affected the price of the currency which dropped after the attack became public.
To be more specific, Coinbase has been through several double-spend attacks over the last three days.
So, what is a double-spend attack?
Also known as a “51% attack”, this attack represents a miner or group of miners on a blockchain which are trying to spend their cryptocurrencies on the same blockchain twice. The goal of this attack isn’t always to double spend cryptocurrencies. There are cases when the purpose of the attack is to discredit a certain crypto or blockchain by affecting its integrity. In the case of Coinbase, the attackers were able to double spend approximately 219,500 ETC. They did so by recovering previously spent coins from the original recipients and transferring them to a new destination controlled by the attackers.
Coinbase’s security engineer Mark Nesbitt said that they observed “repeated deep reorganizations of the Ethereum Classic blockchain, most of which contained double spends”. This was discovered by Coinbase on January 5, and the company stopped on-chain payments in ETC to protect their customers’ funds as well as the exchange platform itself. The attacks appear to be ongoing. At first, the platform identified nine reorganizations that contained double spends which amounted to 88,500 ETC. However, the latest update concerning these attacks is that at least 12 additional reorganizations included double spends, amounting to totaling 219,500 ETC, or approximately $1.1Million).
It’s still not known who the target of the attack is, as the platform itself is not targeted. Fortunately, no customer funds were affected.