A leading cryptocurrency exchange has been forced to halt trading of Ethereum Classic (ETC) after spotting double spend attacks amounting to over $1m.
San Francisco-based Coinbase first detected the suspicious activity on January 5, noting a “deep chain reorganization of the Ethereum Classic blockchain that included a double spend.”
This was followed by another 12 double spends, totalling 219,500 ETC ($1.1m).
However, soon after spotting the first reorg, the exchange halted send/receive activity in the blockchain to protect customer funds.
Double spend or “51%” attacks are made possible when an entity manages to gain control of more than 50% of a blockchain’s hashrate, meaning they can reverse any transactions they make to respend their cryptocurrency funds.
The bigger picture problem is that by gaining majority control of the network, the attacker can raise questions about its integrity. That seems to have been borne out by the sharp drop in the value of ETC over the past 24 hours, although it is now starting to climb again.
ETC buy and sell activity is not affected by the shutdown, but at the time of writing sends and receives remained disabled by Coinbase while it monitored the situation.
“The Coinbase team is currently evaluating the safety of re-enabling sends and receives of Ethereum Classic and will communicate to our customers what to expect regarding support for ETC,” it said.
Double spend attacks are relatively common in the cryptocurrency space. In September last year exchange Bittrex was forced to delist Bitcoin Gold (BTG) currency after the latter refused to pay $250,000 in losses resulting from a 51% attack which may have stolen as much as $18m.
A researcher last year revealed that hackers could launch a double spend attack on a $2bn network like ETC for as little as $1.5m investment, potentially netting over $1bn in profit.