According to a press release on September 1, BTG Bitcoin Gold Team announced its parting ways with Bittrex exchange over refusal to pay 12,372 BTG to cover for the attack on the exchange which happened in May 2018.
The Attack On Bittrex Exchange
An attack on exchanges that took place in May led to carting away of 12,239 worth of BTG from Bittrex exchange and some other cryptocurrencies. The attackers hijacked the vulnerability of the proof-of-work, 51% attack.
During the attack, BTG informed all the major exchanges of the ongoing risk they are prone to, especially as pertains to BTG. An emergency Telegram channel was created to get exchanges notified of a suspicious transaction, which Bittrex refused to be part of.
BTG shared the wallet address of the suspicious transaction to all the major exchanges on the Telegram, Twitter, and other social media channels. To clamp down on the attack, BTG suggested that all exchanges should raise their confirmation requirements to monitor unusual deposit of BTG.
Despite all the measures of alerting all exchanges of the impending danger, the attacker became successful on the May 18th leading to carting away of 12,239 BTG and other cryptocurrencies.
Request To Settle The Losses
After the attack Bittrex exchange required BTG to pay 12,372 BTG to cover the loss from the attack. Bittrex later stated that they would cover a part of the loss and BTG to cover the rest which if not covered they would be delisted from the cryptocurrency exchange.
However, BTGs’ refused to cover for it as they prefer to loan the exchange out of its endowment. The fund in the BTG endowment is stated to be locked for future use, as the BTG is not revenue earning organization.
BTG states in the press release on its site:
“In light of the potential impact on the BTG Community, our Board carefully considered their demand but concluded we are not empowered to make a disbursement from the Endowment to cover a private company’s losses from their own security failures. The Endowment is intended for direct long-term expenses of running the project, as covered in our founding Roadmap/Whitepaper.”
Because of the unresolved discord, Bittrex parted ways with listing BTG. The development team of BTG, on this note, said,
“…impact of Bittrex’s action on our Ecosystem will not be substantial, as Bittrex has not been a top liquidity provider for BTG in recent months.”
The menace of cryptocurrency scam and hacking remains a major militating factor against the growth of cryptocurrency.