Over $1M double-spent in latest Ethereum Classic 51% attack

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A total of 238,306 ETC, worth roughly $1,686,871 at press time, was double-spent in the August 5th Ethereum Classic 51% attack. During the attack, 4,236 blocks were re-orged which allowed the hacker to net a total of 14,234.20 ETC in block rewards.

Beyond that, the core development team behind Ethereum Classic—ETC Labs—has joined forces with the law firm Kobre & Kim as well as the blockchain analytics firm CipherTrace to trace the origin of the attack and subsequently press charges against the attacker.

“Together [ETC Labs, Kobre & Kim, and Ciphertrace] will cooperate with stakeholders and agencies in the United States and wherever else the investigation leads to analyze the transactions and to identify the responsible parties with the knowledge and motive to carry out these attacks. We want to ensure that there are severe consequences for manipulating a public blockchain to steal. We are determined to protect the integrity of the ecosystem,” said Terry Culver, CEO of ETC Labs.

How it happened

Bitquery believed that the August 5 attacker gained control of more than 51% of the ETC network the same way that they did on August 1, by purchasing enough hash power from Nicehash provider daggerhashimoto to give them control of more than 51% of the ETC network. 

According to the Bitquery report, the attacker attempted to double-spend 465,444 ETC (worth roughly $3,286,181 at press time), but was only able to successfully double spend 328,306 ETC. Like the individual that executed a mass digital currency scam on Twitter, the attacker is likely to have a hard—if not impossible—time cashing out their illicit ETC. Especially now that nearly every digital currency market place works with a blockchain analytics firm, and gets alerted when illicitly earned funds get sent to their platform.

“We are proud to help solve this pivotal case which represents more than a major theft because it is an attack on the integrity of a major blockchain,” said Dave Jevans, CEO of CipherTrace. “By tracing these stolen funds to virtual asset service providers, preventing these hackers from converting ill-gotten crypto to cash, we can not only preserve financial integrity but also hold these criminals accountable and help prevent future attacks. This case highlights the critical role blockchain analytics plays in maintaining the stability of the virtual asset economy.”