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Ethereum

Ethereum Classic suspended from Coinbase after transaction irregularities

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Coinbase has announced it is pausing interactions with the Ethereum Classic (ETC) blockchain after detecting a ‘deep chain reorganisation’ including alleged double spends totalled at more than $1 million.

The arbiter claimed there were several instances noted where chains were being replaced at a greater length than previously and that operations were being suspended to safeguard customer funds.

Coinbase explained the potentially nefarious issue of a double spend thus:

“If a single miner has more resources than the entirety of the rest of the network, this miner could pick an arbitrary previous block from which to extend an alternative block history, eventually outpacing the block history produced by the rest of the network and defining a new canonical transaction history,” wrote Mark Nesbitt, Coinbase security engineer in a blog post.

“This on its own might end up being nothing more than a minor inconvenience. After all, the transactions still exist, but they might have been put into a different order, perhaps delaying some of them. However, imagine a miner who also owns a large number of coins. The miner could send those coins to a merchant in transaction, T, while also secretly extending an alternative block history.

“When the miner reveals this secret history, it will contain [alternative transaction] T’, not T. Because T and T’ attempted to send the same coins and T’ is now in the canonical history, this means that T is forever invalid, and the recipient of the coins sent in transaction T never even received them in the new, now-canonical history.”

Earlier this week SlowMist, a Chinese blockchain security firm, published an alert which noted that ETC might have been targeted by a 51% attack. CoinNess, a cryptocurrency trade publication, analysed ETC and detected a ‘certain abnormality’ in regards to its mining hash rate.

ETC subsequently said in a statement that it was ‘working with SlowMist and many others in the crypto community.’ “To be clear we are making no attempt to hide or downplay recent events,” the company said, adding that the double spend allegation reported by Coinbase ‘may be true.’

“Facts are facts and as the situation develops we’ll soon get a full picture of what actually took place.”

“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,” added Nesbitt.

“Coinbase takes security very seriously. As part of that commitment, we monitor blockchains for activity that could be harmful to our customers and take prompt action to safeguard funds.”

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