03 September, 2020
Ethereum Classic Labs hopes to increase protection against 51% attacks on the ETC blockchain by regulating platforms that provide the ability to rent hashing power.
According to the Ethereum Classic Labs blog post on Medium, the latest 51% attacks on the Ethereum Classic network were carried out using hashing power rented from NiceHash. This platform is notorious for the loss of 4,700 BTC, which were stolen at the end of 2017, and the founder of NiceHash is accused by the FBI of creating a forum for cybercriminals. Nevertheless, Nicehash continues to work.
As noted by Ethereum Classic Labs, in addition to ongoing technical updates and ongoing investigations into attacks, ETC Labs has launched a new initiative to engage law enforcement and international regulators to ensure accountability and transparency of hashing power rental services.
“Many exchanges and other cryptocurrency service operators have implemented robust KYC / AML checks. However, platforms that lease hashing power, such as NiceHash, often remain unregulated, which can contribute to money laundering and other illegal activities on these sites. After passing minimal KYC / AML checks or cryptocurrency addresses, platform clients can rent a hashrate to launder cryptocurrency using newly mined coins without history. Given how important hashrate is to the security of PoW-based blockchains, this is a serious vulnerability for the blockchain industry as a whole, ”says Ethereum Classic Labs.
According to the blog post, ETC Labs and its partners will take all the steps necessary to secure the Ethereum Classic network. This includes legal action against those who carry out or facilitate malicious attacks. ETC Labs is working with authorities in their respective jurisdictions and will soon share more information on the progress of this work.
Recall that last month, Ethereum Classic Labs presented a plan to protect the network from 51% attacks, and earlier the organization attracted lawyers and analysts to search for hackers. At the beginning of last year, experts noted that the liquidity of the mining capacity rental market is growing, and at the same time, 51% attacks using rented hashing power are becoming more and more clear-cut.