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Fool’s Gold? Bitcoin Fork Faces Cryptocurrency Exchange Delisting after 51% Attack

Last Updated March 4, 2021 3:38 PM
Josiah Wilmoth
Last Updated March 4, 2021 3:38 PM

Three months after Bitcoin Gold fell prey to a high-profile 51 percent attack, one of the cryptocurrency exchanges affected by that exploit is threatening to delist BTG unless the coin’s developers help cover its losses.

Last week, the Bitcoin Gold organization announced  on its official website that Bittrex, a top-30 cryptocurrency exchange by volume and one of the few to offer USD trading pairs, has informed the project that it will delist BTG since the former has refused to reimburse the 12,372 BTG that the hackers stole from the company’s hot wallet.

As CCN.com reported at the time, the attackers managed to steal an estimated $18 million worth of BTG from multiple cryptocurrency exchanges by using rented mining rigs to accumulate a majority of the Bitcoin Gold network’s hashpower. This allowed them to execute a double spend attack, through which they rewrote recent blockchain data to reverse payments and steal funds from exchanges.

Bitcoin Gold, which has since upgraded the BTG protocol to a new hashing algorithm in response to the incident, claims that it is not responsible for the losses incurred by Bittrex.

The organization wrote:

“Despite all of our efforts, Bittrex was the victim of the last and largest BTG double-spend the attackers performed. The attackers deposited 12,371 BTG from the wallet we previously identified. Several hours later, Bittrex allowed them to trade that BTG and withdraw some amount of other coins, and then the attackers used the 51% attack to double-spend those BTG, invalidating their original deposit. (We do not know the net value of Bittrex’s loss since they have not disclosed the value of the coins they allowed to be withdrawn.)”

Bittrex is said to have informed BTG that it will delist the cryptocurrency unless the project helps cover losses from a double spend attack in May.

The BTG organization further claims that Bittrex later lowered their demand to 6,000 BTG, stating that they would cover the remaining losses out of their own reserves. Nevertheless, the project refused that offer as well, stating that, “we are not empowered to make a disbursement from the Endowment for the purpose of covering a private company’s losses from their own security failures.”

“We feel it’s clear that we took every reasonable step to try to help ensure Bittrex’s safety against this threat,” the statement added.

As of Friday morning, BTG is priced at a global average of $19.23, which makes it the 28th-most valuable cryptocurrency with a market cap of $330 million. This represents a 96 percent decline from the cryptocurrency’s all-time high, according to data from OnChainFX .

Bittrex did not immediately respond to a request for comment sent outside local business hours.

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