On July 30 and August 1, 2020, the Ethereum Classic Network suffered a 51% attack with hash rate purchased from Nicehash; a company previously known for inexplicably losing $62M in Bitcoin and whose founder is currently awaiting extradition to the United States for charges of fraud and racketeering.
In addition to the technical upgrades under immediate development and the ongoing investigation into the attacks, ETC Labs has launched a new initiative to engage law enforcement and regulators to bring accountability and transparency to hash rental.
Exchanges and other digital asset service providers have implemented robust KYC and anti-money laundering programs, however, hash rental platforms such as Nicehash are often unregulated, enabling money laundering and other illegal activities. With no KYC, AML, or crypto address screening, customers are able to rent hash rate to launder cryptocurrency for freshly minted tokens with no history. Considering how important hash rate is to the security of Proof-of-Work blockchains, this is a serious vulnerability for the blockchain ecosystem as a whole.
ETC Labs and its partners will take all steps necessary to secure the Ethereum Classic network, including legal action against those who conduct or facilitate malicious attacks. ETC Labs is currently working with authorities in relevant jurisdictions and will share more information as well as progress updates shortly.