OKEx evaluates delisting for ETC after losses from two attacks of 51%

OKEx evaluates delisting for ETC after losses due to two attacks of 51% - Webp.net resizeimage 16 678x381 1OKEx has confirmed a loss of approximately $ 5,6 million in Ethereum Classic (ETC) due to two recent 51% attacks and is considering removing ETC from its exchanges.

A difficult choice

However, as a cryptocurrency exchange with the highest trading volume of ETCs, OKEx recognized that removing ETCs from trading would not be an easy decision to make, according to Jay Hao, the exchange's chief executive.

“Given ETC's popularity and position, we are not rushing to delist,” said Hao. "However, they must implement significant updates on the network to reduce the chances of another attack happening by 51%."

According to a report released by OKEx on Saturday, the Malta-based cryptocurrency exchange has fully reimbursed its customers for all lost ETCs as part of its user protection policy, and all ETC deposits and withdrawals have been suspended due to attacks.

“We know it's impossible to prevent a 51% attack on any decentralized exchange, but we also don't want to foot the bill for ETC's security vulnerabilities that have made it particularly susceptible to attack,” Hao said.

A vulnerability to be fixed as soon as possible

The recent 51% attacks on Ethereum Classic began on August 1st with a total double loss of $ 5,6 million in ETC. The second attack happened just five days later, hitting about $ 1,68 million in ETC.

A 51% attack on a blockchain refers to a situation where one or more miners try to gain control of more than half of the network's mining power. Compared to blockchains like Bitcoin which have a much higher hashrate, blockchains with lower hashrates including Ethereum Classic are "more vulnerable" to this type of attack, according to the OKEx report.

"It is evident that this violation in the functioning of the blockchain was due to a problem common to Proof-of-Work (PoW) blockchains that have low global hashpower," the report said.

Liquidity and OKEx targeting

“As for why the attackers specifically chose OKEx to buy and trade their ETCs, the most likely reason is liquidity,” the exchange said. “OKEx provides excellent ETC liquidity, recording some of the largest ETC transaction volumes in the industry.

This just means that the attackers likely calculated that they would be able to relatively easily and quickly trade large amounts of ETCs on OKEx. Like other exchanges, OKEx said it will increase confirmation times for ETC deposits and withdrawals in the future.

The fate of Ethereum Classic is now up for debate after the attacks. Options like an emergency hard fork for a different hashing algorithm could help avoid future attacks, ETC Coop Executive Director Bob Summerwill said. There quotation of Ethereum Classic was $ 7,67 at press time, up 1,04% in the past 24 hours.