Coinbase temporarily shuts Ethereum Classic trade suspecting foul play

The popular digital currency exchange has suspended the trading of Ethereum Classic after it detected a possible attack to the cryptocurrency’s network.

Coinbase says that it detected “deep chain reorganization” in the cryptocurrency’s blockchain. They also noticed that the reorganization included a double spend (renders past transactions invalid).  Hence, the exchange decided to investigate further and temporarily suspend Ethereum Classic’s trading to protect customer funds.

Chain Reorganization basically gives a single miner control over the majority mining power which then enables him/her to rewrite the transaction history. They have identified as many as 15 reorganizations so far, of which 12 contained double spends that totaled 219,000 ETC (approximately $1.1 million). This means that customers who may have tried transactions with Ethereum Classic may have been unable to do so because of the number of reorganizations.

“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” mentioned Coinbase’s blog post. Seeing the security compromise at Coinbase, other exchanges have moved up the number of confirmations that are required to process each transaction to filter out any attacks.