- OKEx has published a report regarding the recent Ethereum Classic 51% attacks
- The twin attacks, which occurred last week, lost the exchange $5.6 million
- The token may get delisted if security doesn’t improve
OKEx has published a report that details the events surrounding the recent 51% attacks on Ethereum Classic. The twin attacks, which occurred within a week of each other earlier this month, led to the hackers being able to generate and withdraw ETC tokens to the value of $5.6 million. The exchange has warned that if Ethereum Classic cannot improve the security of its blockchain it may delist the token.
Russian Accounts Behind Attack
OKEx states that the first attack on August 1 saw the attackers use the platform to perform several ETC trades, the proceeds of which became invalid when the attackers achieved a double-spend on the Ethereum Classic network. Following the first attack, OKEx disabled deposits and withdrawals of ETC which protected the exchanges against the second attack on the network, which took place on August 6.
OKEx tracked the attack back to five newly registered accounts, all of which passed the exchange’s Know Your Customer (KYC) requirements, with four attackers verifying as Russian and the fifth as Latvian. The hackers deposited 68,230 ZEC tokens across the five accounts, exchanging this for 807,260 ETC tokens on July 31 and withdrawing it to external addresses for use in the attack.
OKEx May Delist ETC Token
The hack itself involved a three-stage process – creating a shadow chain, double spending, and deep chain reorganization:
Having rented the requisite amount of hashing power through Nicehash, the hackers initialized the attack and created the shadow chain which mirrored the mainnet activity.
The attackers then re-deposited the 807,260 ETC tokens into OKEx, a transaction that was mirrored on the shadow chain, except the address on the shadow chain was changed to an address belonging to the hackers rather than heading to OKEx. This completed the double spend. The 807,260 ETC tokens that arrived back at OKEx were then swapped out for more ZEC and withdrawn, resulting in a $5.6 million loss for OKEx, which they have honored.
ETC to be Delisted?
OKEx says that it has blacklisted all the addresses associated with the hack and will continue to investigate the five accounts. It also says that it will increase confirmation times for ETC deposits and withdrawals, and has not ruled out delisting Ethereum Classic if the community cannot “work to improve the security of its chain.”
