BSV Tokens From 51% Attack Cannot Leave Bitmart Exchange

Reading Time: 2 minutes
  • A U.S. judge has ruled that Bitmart can continue to freeze BSV tokens on its platform that came from a 51% attack
  • The BSV blockchain was continually hacked earlier this year, resulting in incidents of ‘double spending’
  • The owners of the accounts receiving the illegitimate BSV did not respond to the lawsuit

A U.S. District Court judge has ruled that, for the time being, BSV tokens that arrived on the Bitmart platform following a 51% attack on the blockchain cannot be moved. Bitmart had petitioned that the coins, which were moved to their platform and mostly sold by the Russian hackers, should not be released to them given their illegal origin. 51% attacks can result in recent transactions being undone and coins being spent over again, known as ‘double spending’. Proof-of-work coins are susceptible to 51% attacks if they don’t have the requisite amount of decentralization in their mining profile, or the hashrate is so low it can be easily overcome.

Bitmart Froze 92 Accounts

The BSV platform was hit with multiple 51% attacks in July, and although representatives initially denied any coins had not been double-spent, this turned out to be inaccurate as the perpetrators began laundering their coins through the few remaining exchanges that host BSV. The proceeds of these coins were then moved on to various other exchanges such as Binance and OKEx.

Bitmart was able to pinpoint at least 43 of its users that had been damaged by the activities of the BSV chain attackers and froze 92 accounts, and the remaining BSV within them, they found to be associated with the illegal activity.

BSV Big Blocks Overshadowed by Vulnerabilities

Bitmart sought an injunction in the U.S. and, while the jurisdiction was not entirely obvious, Judge Alison J. Nathan ruled in favor of the exchange after the defendants failed to respond to the plea. This means that accounts and the BSV tokens within them will be retained by the exchange, who will presumably freeze or destroy them given that their reintroduction into the system would affect the BSV supply.

The BSV blockchain has been celebrating 2GB blocks recently, but most of the focus has been on the blockchain’s ongoing vulnerability which undermines any increases in block size.