Ethereum Classic suffers second 51% Attack just days after a harmless Chain Reorg

Ethereum Classic miner has successfully staged a 51% attack on the blockchain network resulting in the reorg of over 4,000 blocks

By · Aug 6, 2020 . 5min read

Ethereum Classic 51% attack

Barely a week after Ethereum Classic came in the news, a miner has successfully staged a 51% attack on the blockchain network resulting in the reorg of over 4,000 blocks.

Just like last time when what appeared as a harmless reorg happened in Ethereum Classic network after a miner went offline to return and the reorg happened, Binance was among the first entities to raise the alarm.

In a tweet, Binance, the largest cryptocurrency by daily trade volume, tweeted:

Consequently, Bitfly, a mining pool which is involved in Ethereum Classic mining have halted all Ethereum Classic payouts for mining as well as Binance. The latter halted withdrawal and deposits on its exchange.

Ethereum Classic via its official Twitter was also quick to issue a directive to exchanges, mining pools and other ETC service providers. In a tweet that reads thus:

Interestingly, an analysis from Bitquery, a blockchain intelligence firm states that attacker stole roughly 807K ETC in this latest Ethereum Classic 51% attack. As a 51% attack is meant to be expensive serving as a deterrent to hackers, the hackers, in this case, spend 17.5 BTC to gain control of the Ethereum Classic network. This amounts to $192,000 monetarily. As the report shows, it took the Hacker four days to mine 4,280 blocks. The reorg happened between July 29 to August 1.

Evidently, even the harmless chain reorg was part of the Hacker’s ploy while preparing for the main 51% attack. This is clear from Bitquery’s analysis. The hacker miner introduced a total of 11 transactions in the reorged chain. The hacker transferred about 807, 000 ETC from this wallet 0x63a8ab05ae4a3bed92580e05e7dce3b268b54a7f funnelling the ETC to 5 different addresses. This would then enable him to stage the Ethereum Classic 51% attack everyone seems to be talking about now.

51% attack miner trying launder funds through OKEx crypto exchange

Consequently, the hacker miner is already trying to launder funds it got from the Ethereum Classic 51% attack on OKEx. Data from Bitquery’s investigation suggests just this.

This is the second time miners are staging this kind of attack on Ethereum Classic. Thus, the first time was in January 2019 where miners reorged the chain double-spending 219,500 ETC. This was worth approximately $1.1M at that time.