Coinbase Detects Deep Chain Reorganization on Ethereum Classic (ETC)

    The Ethereum Classic (ETC) allegedly 51% attack continues to generate confusion among market participants. Coinbase, one of the largest cryptocurrency related platforms in the market, wrote in a blog post a few hours ago that it detected a deep chain reorganization of the Ethereum Classic blockchain.

    According to Mark Nesbitt, Security Engineer at Coinbase, the Ethereum Classic blockchain experienced a 51% attack that included a double spend. In order to protect users’ funds, the company decided to pause movements of funds on the ETC blockchain.

    Mark Nesbitt wrote about it:

    “We observed repeated deep reorganization of the Ethereum Classic blockchain, most of which contained double spends. The total value of the double spends that we have observed thus far is 88,500 ($460,000).”

    The company will be informing its users which will be the next steps taken by the company. This includes re-enabling sends and receives of Ethereum Classic. The decision to momentaneously freeze these ETC movements was taken in order to protect users from situations that could affect their assets.

    According to the official Ethereum Classic Twitter account, they informed that they may have an idea of where the hash rate came from. They believe that it came from the ASIC manufacturer Linzhi that confirmed the testing of new 1,400/Mh ethash machines. Furthermore, they say that it was selfish mining and not a 51% attack and that double spends were not detected, contrary to what Coinbase said.

    After this tweet, Ethereum Classic wrote another one explaining that Coinbase did not contact wit ETC personnel regarding the attack and that this situation is an ongoing process.

    As we wrote earlier today at BitcoinExchangeGuide, informed that the Chinese security firm SlowMist alerted that the ETC network could have been targeted by a 51% attack.

    According to Cody Burns, an Ethereum Classic developer advisor, the activity could not be labelled a 51% attack but just a selfish mining attack, confirming what Ethereum Classic commented on Twitter.

    The best what companies such as exchanges and businesses are to increase the number of confirmation blocks to more than 400 blocks. This would allow the network to be more secure during this attack.

    CoinDesk reported that Linzhi Shenzhen’s Director of Operations, Wolfgang Spraul, denied the allegations that they were behind this attack.

    “We are categorically denying such claims, they are entirely baseless and may be part of the attack itself,” he commented.

    He went on saying that if the company would test ASIC miners, they would never do it on a mainnet such as Ethereum Classic, that has been operative in the market for a very long time.

    It is important to remember that the Ethereum Classic community has been experiencing some moments of tension during December. As we wrote a few weeks ago, Ethereum Classic saw an attempted community takeover by Digital Finance Group (DFG), the company in charge of ETC Labs and one of the most active developers in the network.

    There is no more information regarding this ongoing attack on ETC.

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