Ethereum Classic 51% Attackers Return $100,000 to Crypto Exchange Gate.io

Those responsible for the recent 51% attack on Ethereum Classic (ETC) have reportedly returned $100,000 worth of stolen funds to an affected cryptocurrency exchange, Gate.io, after the firm tried to contact the attacker.

According to a recently published post Gate.io hadn’t heard back from the attackers until now. Since some of the stolen funds were returned, the exchange now believes the hacker may have been a white hat hacker, and not someone trying to profit off of the move.

We still don't know the reason. If the attacker didn't run it for profit, he might be a white hacker who wanted to remind people the risks in blockchain consensus and hashing power security

Gate.io noted, however, that its analysis found ETC’s blockchain is still vulnerable to attacks and, as such, has raised the number of confirmations on its platform to 4,000. It has also launched a “strict 51% detect for enhanced protection.”

It advised other crypto exchanges to adopt similar measures to protect themselves against similar attacks in the future. As CryptoGlobe covered, the exchange revealed earlier that it was affected by the 51% attack on Ethereum Classic, as it had to cover nearly $200,000 worth of losses after 40,000 ETC tokens were taken from its wallets.

While initially the development team behind ETC claimed the 51% appeared to not be an actual attack, it soon recognized it was. A private ETC mining pool has recently been found to be accumulating hashpower since the attack, which could mean it’s planning to do the same thing.

Meanwhile Grayscale Investments, the organization behind the Ethereum Classic Investment Trust (ETCG), informed some of the investors that contacted them about the incident that ETCG’s funds are “not at direct risk.”

This, as according to Vertcoin developer Gert-Jaap Glasergen, 51% attacks can only double spend the attacker’s own coins, not someone else’s. The risk, as such, is for those who accept ETC – or another attacked cryptocurrency - for goods and services, like cryptocurrency exchanges.

At press time, ETC is trading at about $4.55 after falling 2.3% in the last 24-hour period. After the attack, the cryptocurrency’s price dropped from about $5 to a $4.3 low.

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Israeli Hacker Indicted For $1.75 Million Cryptocurrency Theft

A hacker from Tel Aviv named Eliyahu Gigi was recently indicted for his alleged role in stealing roughly NIS 6.1 million (or $1.75 million) in cryptocurrencies from people in numerous different countries, including Germany, Belgium and the Netherlands.

According the indictment filed this week, Gigi operated numerous scam websites that infected computers with malware that would steal cryptocurrencies that were stored on the devices.

The hacker stole nearly $2 million worth of bitcoin, ethereum, and dash, before they were arrested in June of this year. Gigi carefully covered his tracks by attempting to use remote servers and doing his best to conceal the cryptocurrencies and the wallet addresses that they were stored in.

He then transferred the currencies between different wallets, split them into different cryptocurrencies and used other tactics to obfuscate the ownership of the funds.

During the investigation, it was initially suspected that Gigi was guilty of stealing $100 million, however, once the investigation was concluded, that number was significantly scaled down to less than $2 million.

According to the Israeli publication Globes the investigation was conducted by the Israeli Police's cyber unit, and led to the arrest of Gigi and his younger brother, a 22-year-old demobilized soldier. The news outlet adds:

At the outset of the investigation, suspicions were raised that the two brothers had stolen $100 million from digital accounts kept in bitcoin through an international fishing fraud. The indictment eventually filed was against only the older brother, and the initial suspicions that $100 million had been stolen were scaled down to NIS 6 million. [$1.75 million]

Police were initially tipped off to the crime after receiving reports the hacker was sending messages to users on cryptocurrency forums, directing them to a website that claimed to offer wallet management software.

Some of the users who received the message thought that the website looked suspicious. Worried about their security, they reported the websites and Gigi's forum accounts to police.