We regret to inform our community that the crypto exchange Bittrex has decided to de-list BTG after we declined to pay them 12,372 BTG to remain listed.
We suspect the impact Bittrex’s action on our Ecosystem will not be substantial, as Bittrex has not been a top liquidity provider for BTG in recent months (current top exchanges include HitBTC, Bithumb, Binance, Bitinka, and Bitfinex; Bittrex markets represent a small fraction of our volume at this time.)
Bittrex announced this decision today based on a double-spend attack they suffered back on May 19th, despite all our efforts to assist them, and despite the fact that the danger is now over. As a reminder, in May malicious parties used rented power from NiceHash to perform 51% attacks which they used to attack exchanges with double-spends. After our successful Network Upgrade hardfork on July 3rd, the risk is mitigated, and most exchanges have re-opened their wallets and reduced confirmation requirements to pre-Upgrade levels.
Bittrex informed us that they make this decision because the BTG team would not “take responsibility for our chain,” and that taking responsibility meant paying Bittrex 12,372 BTG to cover the loss they incurred. They later informed us they would cover part of the loss from their own BTG reserves and requested we pay the remaining ~6000 BTG, and that if we did not, we would be delisted. This may seem like a small amount to a profitable exchange, but it is a significant fraction of the available funds from the Endowment which supports the Bitcoin Gold project. (Our non-profit organization has no revenue streams, all BTG mining rewards go to miners, and nearly half the funds in the Endowment remain time-locked for future use – recall that 60,000 of the 100,000 coins mined to establish the Endowment were time-locked for up to 3 years from November of 2017.) We offered a BTG loan from the Endowment to help Bittrex address short-term liquidity problems, but they declined and insisted on a payment.
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 for the purpose of covering 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.
Everyone knows 51% attacks and Double-Spends have always been a known risk in the PoW blockchain world. The attacks on exchanges in May were not the result of any fault or flaw in the BTG blockchain or code (which are essentially the same as the Bitcoin code.) The attackers rented massive hashpower through the NiceHash rental market (perhaps aided by their own mining pools and/or ASICs) – the attackers bear responsibility for their attacks.
The Bitcoin Gold team is not responsible for security policy within private entities like Bitrex; those who earn revenue running a private business must manage the related risks and are ultimately responsible for their own security.
All that having been said, during the 3.5 days in question, the Bitcoin Gold Team took extensive measures to help Bittrex – and other exchanges – defend themselves. We:
- gave Bittrex the attacker’s wallet address
- advised they raise their confirmation requirements to give them adequate time to respond
- advised them to flag and review any unusually large deposits
we even warned them of the onset of the actual attack which victimized them
Despite all of our efforts, Bittrex was the victim of the last and largest BTG double-spend the attackers performed. 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.)
We feel it’s clear that we took every reasonable step to try to help ensure Bittrex’s safety against this threat.
All our exchange partners can rest assured we will continue to work to assist them whenever possible, and that we will continue to work towards improvements which will increase safety in the crypto space.
Respectfully yours,
The Bitcoin Gold Organization
Do you think Bittrex takes advantage of their statute and asks for fees without any reason?