Coinbase has halted trading of Ethereum Classic (ETC) tokens after noticing double spend on its associated blockchain.
On 1/5/2019, Coinbase detected a deep chain reorganization of the Ethereum Classic blockchain that included a double spend. In order to protect customer funds, we immediately paused movements of these funds on the ETC blockchain. Read more here: https://t.co/vCx89dz44m
— Coinbase (@coinbase) January 7, 2019
According to the Coinbase blog, they detected nine “reorganizations” of its transaction history, including double spend of 88,500 ETC, the equivalent of approximately $460,000 USD. This type of reorganization can only happen if 51% of the network approves the transactions. When done maliciously to create transactions that did not happen or create duplicate transactions, it means that hackers have taken over 51% or more of the network, hence the name “51% attack.”
This attack is especially notable for the Ethereum Classic chain, as it was born out of the decision not to rollback the DAO Hack, as it is still unclear how this attack will be dealt with on a go forward basis.
Update (1/13): Listen to Charlie Lee speak about the attack on Laura Shin’s Unconfirmed Podcast, including what is happening now and why the price of Ethereum Classic has not been greatly affected.