The Japanese cryptocurrency Monacoin was attacked by cybercriminals. The fraud has caused $ 90,000 losses.
It looks like the attack wasn’t planned like this at the beginning of operations. The hacker managed to mine one block but didn’t transfer it to other miners. This activity can be called a “selfish mining attack“. The purpose of this secret miner is to decipher another block on the Monacoin network beforehand, so the miner will create a branch that is more advanced than the ones existing in the chain.
The concept is simple and lasting. According to the standards in the blockchain networks, once the chain is longer than others, it eliminates all blocks found by other miners involved in the same activity.
Once a miner manages to find more blocks and create its own chain, the other blocks remain “orphan“. The positive side is that there may be another player who will win. If the miner manages transactions on its chain that will soon be decomposed and receives the purchase before it’s ineligible, then the transaction wasn’t even carried out.
According to the records, it was identified that the hacker planned to transfer the Monacoins to trading platforms outside Japan, like Livecoin. Unfortunately, the attacker hasn’t yet been found. He managed to execute 57% of the hashrate on the way to complete its activity.
It has also been identified that the miner actually expects half a year to find the weaknesses of the Monacoin network and attack.
On 17 May, the Monacoin team mentioned in a Twitter post that they “gasped the attack”. However, since then, the platform has no longer informed users about the incident. From other sources, it’s known that developers are still in the process of improving the Monacoin network.
— monacoinproject (@tcejorpniocanom) May 17, 2018
The attacker has been removed from the Monaco system since 19 May. According to Monacoin, the funds in the users’ wallets weren’t subjected to the attack. Several crypto exchanges based in Japan have suspended deposits in order to improve their technological system.