Bitcoin Gold delisted from major cryptocurrency exchange after refusing to pay hack damages

Bittrex, one of the largest cryptocurrency exchange platforms, has delisted Bitcoin Gold (BTG) from its trading platform over the weekend after BTG maintainers declined to pay half of the damages Bittrex suffered during a complex multi-stage cyber-attack earlier this year.

According to a statement from the BTG team, Bittrex asked the BTG team to pay 12,372 BTG (~$256,000) as reparations for the attacks.

The BTG team declined to pay the asked sum, stating that their private assets can't be used to cover "a private company's losses from their own security failures."

BTG maintainers said they did all that was possible on their end to help trading platforms prevent the attacks, but they did not have the legal power to intervene inside a private company like Bittrex.

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The hack at the center of this dispute took place between May 18 and 22, according to an incident response report published this May.

The BTG team says the hack was a combination between a 51% attack and a double-spend attack.

BTG experts said hackers rented servers through the NiceHash cryptocurrency mining market to overwhelm the Bitcoin Gold network and take control of more than half the BTG network computational hashrate.

This is what cryptocurrency experts call a "51% attack," a dangerous scenario that grants attackers the ability to modify transaction details on the entire Bitcoin Gold network.

The BTG team says that during the 3.5 days attackers overwhelmed the Bitcoin Gold network, hackers deposited large quantities of Bitcoin Gold funds at cryptocurrency trading platforms.

Seconds after these deposits, hackers would convert the funds into another cryptocurrency and transfer the money to new accounts at other exchanges.

Once funds were converted and stolen, hackers would then use their 51% control over the BTG network to reverse the initial BTG deposit, invalidating the transaction and returning their original Bitcoin Gold funds to their personal wallets. This second stage is what's known as a double-spend attack.

Hackers repeated this operation several times between May 18 and 22. Money was never stolen from end users' accounts but trading platforms only.

At the time, BTG maintainers repeatedly warned cryptocurrency trading platforms to raise transaction confirmation thresholds, a solution that would have made it more costly for attackers to mount a 51% attack.

The BTG maintainers also warned trading platforms about the attacker's wallet address, telling them to refuse any incoming BTG deposits, and hence preventing the more devastating double-spend attack even if the 51% attack was successful.

Back in May, cryptocurrency experts said hackers successfully used this dual 51% & double-spend attack to steal over 388,000 BTG coins (worth over $18 million at the time) from several cryptocurrency exchanges, but they did not reveal which platforms suffered losses during the attacks.

Most platforms either stopped the attacks in time or swallowed the losses after failing to heed warnings coming from the BTG team.

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But according to a statement published over the weekend by the BTG team, the only platform that didn't follow normal practices was Bittrex, who, in an unprecedented move, tried to convince the BTG maintainers to pay for a hack's losses.

Something like this has never happened before, and the BTG team didn't want to hear it. Bittrex tried to meet BTG maintainers in the middle, but the BTG team also declined to pay a halved reparations fee of roughly 6,000 BTG coins (~$126,000).

Following the failure to strike an agreement, Bittrex delisted Bitcoin Gold trading options on Saturday, September 1, telling BTG maintainers they reached their final decision after the BTG team did not take a part of the responsibility for the hack.

The team behind Bitcoin Gold said the delisting doesn't impact BTG trading, as Bittrex was never a top exchange for BTG operations.

Bitcoin Gold is ranked as the 29th most popular cryptocurrency on cryptocurrency ranking site CoinMarketCap. Bittrex is ranked as the 23rd most popular trading platform on the same site.

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Canada’s eSports tournament creates its own cryptocurrency
A Canadian eSports company is the latest to try and offer its own cryptocurrency. Canada Cup is introducing the eSports ecosystem (ESE) digital token (because, apparently, it couldn’t be creative enough to come up with a unique name), which will reportedly empower all gamers through the creation of a digital eSports currency specifically for the community.

Canada's leading eSports tournament creates its own cryptocurrencyESE will offer a medium to transfer value, reward both casual and professional players and compliment the current fiat-based payout structure. The token is designed, as described by Canada Cup, to fill a gap that prevents a number of casual gamers from being rewarded for their participation.

ESE token holders can passively earn more tokens through Canada Cup’s “staking rewards” program. This will provide an additional income source to both gamers and organizers, which will help them finance future participation. An ESE Loyalty Nodes program is also anticipated, and is designed to provide stability to the token award program above and beyond the passive awards users can accumulate. The staking rewards and Loyalty Nodes programs won’t be ready until sometime during the first quarter of next year.

A community wallet, representing 17% of the token’s initial supply, will be used to give back to the community. It will offer a variety of prize pools, player and team sponsorships, scholarships, charity donations and eSports advertisements.

Canada Cup, which was founded in 2010, hosts a number of tournaments for a variety of fighting games and is behind “the largest and most prestigious fighting game tournament in Canada,” the Canadian Fighting Game tournament.

According to the ESE white paper (in pdf), the currency will solve a number of problems, including complimenting fiat payouts by adding ESE tokens from the community wallet, which would increase the value of the total prize pool to support professional gamers financially and make it easier to transition into a gaming career.

It also promises to broaden payout structures to allow more players to reap rewards from tournaments, which means rewards are no longer limited to the top echelon of players, but can be extended to casual players due to an increased prize pool. Lastly, the currency will encourage tournament organizers to continue hosting events by supporting these events financially with ESE tokens from the community wallet to ensure that these events are sustainable, according to the company.