We have come to learn that users may be at risk from the exhanges Coinbase and GDAX. This is breaking right now and we have some pending reports of how deep this may actually reach.
In actual fact, GDAX and Coinbase are related. They are owned by the same company.
It has become apparent that GDAX have suffered major replay attacks in the early trading of the new hardfork (ETHF) clone. They did not properly secure themselves from the attack after advice presented by the Ethereum foundation was taken.
During this period it is unknown what actual amount of ETC was relayed but we have estimated it is much bigger than initially anticipated. This occurred over a number of days as GDAX where assured by the Ethereum foundation there would be no interest in the original and unbreakable genesis chain. They where even aware of the attack vector but left it unpatched. It is specualted this may have been an attempt to kill off their competing chain.
At the time of the attack the $ETC was trading between $0.26 USD and $0.58 cents. It is now trading successfully above $1.80 USD after failed attempts harm the chain.
For every dollar taken during the replay attack they are now in deficit over appx -540%.
Sadly, If $1 million USD in ETH was withdrawn at the time that will place GDAX in a loss of -%540 or over USD $6M at current prices.
If Ethereum classic continues to rise, this may spell disaster if they have not repurchased customer funds.
This may be crippling to a smaller exchange of their size and we understand there are already users having difficulty withdrawing funds and getting deposits credited.
We understand they have just raised fees on their sister site @coinbase to outrageous and unknown levels never before seen inside the crypto world. This may be an attempt to cover the losses sustained on GDAX.
Lets say I withdrew 28,000 ETH from GDAX at the time. What would of happened is my transaction would have reflected on both chains and I would have ended up with 28,000 ETH and 28,000 ETC. The ETC would of been worth around $6,440 at the time but has since soared in value to over $50,400. This moment, they continue to climb in value as what seems to be a rejection of the clone.
Any losses GDAX sustained are now multiplied and it doesn’t look to be going away.
At the time of writing, the fraudulent chain now trading as $ETH on exchanges has declined in value and has seen a large % of miners abandon the chain and begin mining on the original again once more. The mining power can be seen clearly drop off on http://etherscan.io/charts/hashrate and that also poses a threat as the price plummets.
As it weakens, the original chain may assume full power. This is very dangerous right now.
You can find critical information about the competing chains here: https://slacknation.github.io/medium/13/13.html
We feel it may be important to inform the community as we know people close to us who have suffered through exchanges in the past.
We all remember what happened to disgraced crypto exchange Cryptsy. At first, users couldn’t withdraw or transfer funds. Then, slowly they would process with delay after delay. They suffered a large scale hack and had to rely on a rolling Ponzi system in order to keep the exchange running.
Eventually, they just gave up and ran off with everyones money. Cryptsy were a respectable exchange for some time but it all changed very quickly. Coinbase appears to have a nice looking website but we begin to worry when we soon learn they are not crediting users funds and have begun stalling on withdrawals.
If you spend a couple minutes and do a search of the #coinbase $ETC or #GDAX hastag on twitter you can see there are a upset and angry individuals. Unfortunately you need to do some scrolling as they have activated their news wire and tried one of the more popular forms of stealth censorship (sliding) in attempt to bury the voice of those affected.
Sadly users have already started to close their accounts in protest.
Fortunately, this wont be at our expense but the exchanges will need to provide the customer assets. Coinbase claims to be insured by http://www.aon.com/. We are not sure if GDAX is insured at this point but will update as the situation develops. They state on their website “Specifically, Coinbase’s insurance policy would respond in the event that digital currency stored in Coinbase was lost or stolen as a result of a breach of our physical security, cyber security, or as a result of employee theft.”(https://support.coinbase.com/customer/portal/articles/1662379-how-is-coinbase-insured-)
In a worrying statement released to the public GDAX leaked some deeply concerning information.
They claim to hold %100 of customers $ETC in cold storage which is impossible. We are aware of individuals who repeated the process and collected more than their fair share of $ETC. How can they possibly have %100 of funds if that is true?
They are either severely incompetent or do not have customer funds. It does not take “weeks” to instate withdrawals of customer funds. (Update) We have confirmed with experts that this is a minor feature and can be implemented overnight.
The statement is entirely misleading. Coinbase have been known in the past to have had some very dodgy dealings with claims of mutisig addresses. They attempted to cover it up with a “misunderstanding”.
They then updated their documents 5 days ago. The page was offline at the time of the article:https://support.coinbase.com/customer/en/portal/articles/1743782-the-multisig-vault
We haven’t even started our update on BTC-e (UPDATE) BTC-e may have lashed out in anger with their initial statement.
It was not their fault losing customers ETC as they were advised by the Ethereum foundation. -We apologise for any misunderstanding and harm this may have caused.
It has been revealed that the Ethereum foundation where coercing exchanges to abandon customers assets as they saw no value in the tokens. This was found on one of crypto’s most advanced and trusted trading platforms: POLONIEX.
“Despite repeated assurances from representatives of the Ethereum foundation that the community had little to no interest in Ether on the unforked chain (ETC), demand for a market grew rapidly, as did over-the-counter trading between private sellers and buyers.”
After uncovering some disturbing documents and email leaks we soon discovered the Foundation participated in misleading and fraudulently rigged voting systems in order to push their cloned chain onto exchanges.
They where completely aware of the replay attacks and chose to ignore the fatal flaw’s EVEN advising exchanges against protection taking advantage of their positions as trusted advisors.
Concerned developers had raised the issue but were promptly dismissed.
Sadly, this has been extracted from their website written over a year ago.
“Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.”
We now need a new “Genesis Foundation” that will uphold the original core values.
There have been trusted and well known figures rise to offer support and these people are who we look to in order to form the new foundation.
Team BitFlikz have attempted to reach out to the foundation and negotiate a handover of the $ETC assets but remain unsuccessful.
It has been speculated they may have already sold the communities funding as undercover chat logs have begun to leak
This is a very sad day in crypto history. Satoshi will be ashamed.
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