Bitcoin Gold Team: ‘Bittrex Has Decided to De-List BTG After We Declined to Pay Them 12,372 BTG to Remain Listed’

On Saturday (1 September 2018), the Bitcoin Gold (BTG) team announced on its website that they have been informed by the cryptocurrency exchange Bittrex that BTG will get de-listed because the BTG team has refused to pay compensation for the 12,372 BTG lost by the exchange as the result of the May 2018 double-spend attack on BTG.

Bitcoin Gold is a hard fork of Bitcoin (released in November 2017) that differs from Bitcoin by using Equihash instead of SHA-256 for its Proof-of-Work (PoW) algorithm.

On 19 May 2018, as covered by CryptoGlobe, Bitcoin Gold became the target of attacks (which resulted in more than 388,000 BTG, or roughly $18 million, being stolen from crypto exchanges): "... malicious parties used rented power from NiceHash to perform 51% attacks which they used to attack exchanges with double-spends."

The team is saying:

  • Bittrex told them that it was making this decision because the BTG team was not "taking responsibility" for its chain and paying 12,372 as compensation for the loss suffered by the exchange. 
  • Bittrex later told them that the exchange would cover part of the loss from its own BTG reserves, and that the team had to pay the remaining (approximately) 6000 BTG, or BTG would get de-listed.
  • As a non-profit organization with no revenue streams and 40% of its Endowment fund (used for growing the BTG ecosystem) time-locked for future use, the amount of compensation required by Bittrex was not easy for them to pay, and the BTG Board felt that it did not have the power to use Endowment funds to cover "a private company’s losses from their own security failures."
  • It told Bittrex that it was willing to help with "short-term liquidity problems" by offering the exchange a BTG loan (from the Endowmment fund); this offer was declined, and Bittrex insisted on a payment.
  • 51% attacks and double-spends are an unfortunate fact of life in the PoW blockchain world.
  • The attacks that occurred in May were not the fault of any defect in the BTG blockchain or code; the hackers "rented massive hashpower through the NiceHash rental market (perhaps aided by their own mining pools and/or ASICs)."
  • It is neither responsible for Bittrex's security policy nor responsible for managing the risks of a running a crypto exchange business.
  • It tried to help Bittrex and other exchanges defend themselves during the 3.5 day period in which the attacks took place (e.g. by providing the attacker's wallet address, or advising them to flag and review unusually large deposits).
  • "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.) "

Finally, the Bitcoin Gold team says that it is not too worried by the effects of Bittrex's decision to de-list BTG since "Bittrex has not been a top liquidity provider for BTG in recent months."

According to data from CryptoCompare, at press time, BTG is trading at $21.66, up 1.26% in the past 24-hour period.

Featured Image Courtesy of Bitcoin Gold