40,000 ETC stolen from Gate.io – Attack 51%

Cryptocurrency exchange Gate.io confirmed that it had lost about $220,000 worth of Ethereum Classic coins – about 40,000 ETC – during the ongoing manipulation of the project’s blockchain network. The exchange confirmed Tuesday that the Ethereum Classic blockchain was under 51% attack – in which a single entity takes control of more than half the network’s hash power that allows it to rewrite its transaction history and double-spend coins – and identified three accounts about the attacker(s).

“It happened between 0:40 Jan.7, 2019 and Jan 4:20 Jan.7, 2019 UTC for about 4 hours,” Gate.io revealed in a blog post. “All the transactions were confirmed normally on the ETC blockchain and became invalid after the blockchain rollback.” At the time of transfers, the ETC/USD rate was fluctuating between $4.90 and $5.25, according to the details available on CoinMarketCap.com.

“Gate.io’s censor successfully blocked attacker’s transactions at the beginning and submitted them to the manual exam,” explained Gate.io. “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. Gate.io will take all the loss for the users.” Ethereum Classic developer Donald McIntyre admitted they were looking at a textbook 51% and double spend attack – an opinion which was refuted by Cody Burns, another fellow ETC developer, who believed that there was more room for investigation.