OKEx has suspended deposits and withdrawals of ETC until the network is “stable.” KuCoin decided to remove ETC from loan requests and trading.
Following the recent 51% attacks, cryptocurrency brokerages are making decisions regarding the Ethereum Classic (ETC) network. For instance, the services of OKEx and KuCoin have restricted the operations with the crypto asset as a safeguard measure.
Chinese brokerage OKEx, which has offices in Malta and operations in more than 100 countries, suspended all deposits and withdrawals of ETC on its platform, following the first attack on July 31st. The company noted on August 15th that the decision protected its platform during the second attack, which occurred on August 6th. However, the company later admitted that it suffered a loss of USD 5.6 million due to double-spending.
The entity stressed that the losses did not involve users’ assets, but that it was necessary to suspend five accounts as hackers used them in the attack. Regarding the stolen USD 5.6 million, OKEx said that it assumed the losses following its “user protection policy.”
After the event, OKEx confirmed that it is considering removing the cryptocurrency from its exchange system. For the time being, the company has reported that it will not restore ETC support “until it considers that the network is stable again”, which will depend on the “work of the Ethereum Classic community”.
Concerning KuCoin, which operates from the Seychelles archipelago in the Indian Ocean, the decision was more radical. The brokerage made it clear in an official announcement that it will no longer offer ETC support for loan requests or trading.
KuCoin made that decision due to the “instability of the current ETC network” and to protect the “user experience in margin trading”. For that reason, they will remove ETC trading pairs from the margin market, without impacting the spot market.
The restriction of loans came into effect on August 8th, while traders’ cessation of operations with ETC ended on August 10th.
Details about Attack on Ethereum Classic
Analytics firm Bitquery confirmed that those involved double-spending of 807,260 ETC in the first attack. At the time, that represented USD 5.6 million, the same amount that OKEx reported. They also reported spending 17.5 BTC (equivalent to USD 192,000) to buy processing power and execute the action.
In the second attack, there was a double-spending of 238,306 ETC (equivalent to around USD 1.68 million), according to Bitquery. This time, the attackers used the Bitfinex platform and an unidentified service. In a first attempt, there was an attempt to double-spend 465,444 ETC (equivalent to about USD 3.3 million).
The Ethereum Classic network has suffered similar attacks in the past, which has generated actions of this type among exchanges or brokerages. In early 2019, exchanges Kraken, Coinbase, and Poloniex stopped deposits and withdrawals for the same reasons. Binance, OKEx, and Bitfly increased the number of confirmations for ETC transactions.
By Alexander Salazar
