Coinbase released a detailed report on the heavy-loss Ethereum Classic attack targeting two cryptocurrency exchanges, explaining how Coinbase was protected from this attack.
Coinbase, one of the largest exchanges in the world, published an analysis of the 51 percent Ethereum Classic attack in early August. In the report, what happened during the attack was explained and analyzed.
Coinbase, which is one of the most used exchanges in addition to being a crypto money storage platform, stated that they were not the target of the attack and that none of their customers and investors’ funds were stolen. In the analysis, it was also stated that as a result of the “double spending attack”, approximately $ 9 million worth of assets were stolen from crypto money exchanges.
As will be remembered, there were two separate 51 percent attacks on the Ethereum Classic (ETC) Proof-of-Work blockchain with a total market value of more than $ 770 million. The attackers transferred millions of dollars’ worth of ETCs to OKEx and Bitfinex exchanges, converted their funds into other cryptocurrencies on two exchanges, and then removed them from the platforms.
The attackers who used a hash power of more than 51 percent of the total of all miners and obtained this power on loan, thus deleted their ETC submissions to the exchanges, and both ETCs and the assets they received in return remained in their hands.
Coinbase stated in its analysis that the Ethereum Classic blockchain was forked into two different chains, the basis of which was how ETC node software clients parse the blockchain data. Some of the nodes of these clients run on blocks that are beyond a certain age and are considered to be “old-old”, without many transactions. For this reason, it is not stored on the node in order not to create a load in the memory capacity. In this case, the 51 percent attack tried to replace the blocks that were already thought to be old. This caused parity nodes running exemptly to stick to the original blockchain data, while operators of nodes running different clients such as Geth also accepted 51 percent attack blocks.
Coinbase recognized the attack early
Coinbase, which lists many cryptocurrencies and has millions of customers, runs various nodes and clients for many different blockchains. This enabled the company to recognize the problem early and allowed the source of the split to be investigated. Therefore, the company was protected from attack. In a statement released by the company, “Coinbase has significantly increased its approval control requirements. This has ensured that there is no double spending attack on the platform ”. And to avoid long-term bifurcation of the ETC blockchain, Coinbase and other exempted operators resynchronized their nodes with the dominant chain that contains double spend transactions.
Ethereum Classic Labs partnered with crypto intelligence firm CipherTrace and law firm Kobre and Kim to file a criminal complaint against the ETC attack. Ethereum Classic Labs has also published a Network Security Plan to defend itself against future attacks and to increase coordination between stakeholders.