Bitcoin Gold (BTG) has had a bad year when its network suffered a 51% attack last May which led to a loss of around $18 million. The attack was popularly known to have affected Bittrex where the cryptocurrency exchange was tricked into believing the attackers had more funds than they actually did.
How much was stolen from Bittrex remains unknown, but Bitcoin Gold stated that around 12,000 BTG was requested to compensate for the losses. As a response to the events concerning BTG, the exchange will soon delist the cryptocurrency by September 14.
The attack had a lot to do with the nature of Bitcoin Gold and major cryptocurrency exchanges specifically. For one, the attack had targeted those exchanges that accepted large deposits automatically, allowed for quick trades, and fast withdrawals – features major crypto exchanges offer.
Secondly, Bitcoin Gold was the cryptocurrency used to make the attack possible. By the time Bittrex noticed the attack, the damage had already been done and the attacker had withdrawn a large amount already. The exchange then pointed out that Bitcoin Gold’s Proof-of-Work consensus was the root of the problem, but the BTG development team denied responsibility for their concerns.
Bitcoin Gold’s development team then shared a statement in response:
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 ~6,000 BTG ($127,000), and that if we did not, we would be delisted.
The BTG team refused to pay for the sum requested saying its assets should not be used to make up for "a private company's losses from their own security failures."
Despite denying responsibility and refusing to pay, Bitcoin Gold developers have acknowledged the existing vulnerabilities in its network are planning for an upgrade through a hard fork.
This series of events has made a serious impact on Bittrex as a top ranking cryptocurrency exchange. In 2017, before the fake wallet incident with Bitcoin Gold took place, it had been 5th in terms of market cap. Today, it is ranked only 29th.