A little-known cryptocurrency called AurumCoin (AU) has claimed that it was hit by 51 percent attack, and crypto exchange Cryptopia, where…
A little-known cryptocurrency called AurumCoin (AU) has claimed that it was hit by 51 percent attack, and crypto exchange Cryptopia, where the cryptocurrency is listed, lost 15,752.26 AU (approx. $550,000 at the time of writing this article). However, the cryptocurrency has shifted the blame on Cryptopia. On AurumCoin’s website, it has claimed that it is not responsible to anyone since it is an open-source distributed currency. Cryptopia, on the other hand, has not yet acknowledged any loss.
AurumCoin (AU) is purportedly a gold-backed cryptocurrency, where each token is pegged to the value of pure 24K gold. AurumCoin claims to back each AU with 0.75 grams of gold stored in secure vaults worldwide. It has been running its own blockchain since 2014, where AU is mineable (despite its supposed gold peg) with a hard cap of 300,000 coins.
Also, the price of AU has not seen any stability that would expected out of a truly gold-backed cryptocurrency. AurumCoin (AU) is currently priced at $35.01, up by 72 percent in the last 24 hours. In the past week alone, AU shot up by nearly 400 percent from $9.50 to its current price.
A 51 percent attack is when a hacker is able to take control over a crypto network with more than 51 percent of its hash rate. It would give them the authority to control transactions, including stopping new transactions, reversing transactions and double spending coins. It has been demonstrated in the past how easy it is to perform a 51 percent attack on small cryptocurrencies.
With a market cap of just $10 million, AurumCoin was an easy target. The hacker sent 15,752.26 AU to Cryptopia and sold it for a different cryptocurrency. Once the transaction was done, the hacker allegedly used their superior hash power to reverse the transaction, as though it never happened. Based out of New Zealand, Cryptopia is a popular cryptocurrency exchange known for listing a variety of small-cap coins like these.
Although Cryptopia has not acknowledged the attack, AurumCoin published the following statement on top of their website:
"Aurum coin (AU) network was hacked (51 percent attack), a total of 15,752.26 AU is missing from Cryptopia’s wallet (cryptopia.co.nz exchange). Aurum coin network is not the responsibility of anyone, same as bitcoin network, it is an open source distributed crypto currency. What’s worse is that cryptopia exchange do not admit it. This is not the way to solve this problem."
It is not clear what AurumCoin expects Cryptopia to do. It has constantly insisted that Cryptopia was hacked. However, the fact is, AurumCoin lacked the hash rate to prevent a 51 percent attack which resulted in Cryptopia losing over half a million dollars. Recently, Bittrex delisted Bitcoin Gold after losing some funds due to a similar 51 percent attack.
Editor's Note: CCN has reached out to Cryptopia for confirmation on whether it lost funds as the result of a double spend attack. According to the exchange's website, no AU trades have been processed since early October, when the token's markets were halted for an "infrastructure upgrade."
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Last modified (UTC): November 13, 2018 6:56 PM