Coinbase Inc. and Kraken have suspended trading of the Ethereum Classic after a “51 percent” attack caused dual transactions to appear on the cryptocurrency’s blockchain.

A 51 percent attack is an attack by a group of miners controlling more than 50 percent of a given cryptocurrency’s mining hash rate, a measure of how much computing power the cryptocurrency network is consuming in order to be continuously operational.

Once they gain control, the attackers are able to prevent new transactions from gaining confirmations. This allows them to both halt payments between some or all users and reverse transactions that were completed while they were in control, meaning that they are able to “double-spend” coins.

In the case of Ethereum Classic, a spinoff of the better-known Ethereum that dates back to 2016, the 51 percent attack allowed those behind it to double-spend 88,500 ETC, worth about $440,000.

According to Coinbase today, the first “deep chain reorganization” of the Ethereum Classic blockchain attack was first detected on Jan. 5, followed by eight more attacks involving double-spending. The exchange has suspended all trading in the cryptocurrency and is now taking a wait-and-see approach.

“The Coinbase team is currently evaluating the safety of re-enabling sends and receives of Ethereum Classic and will communicate to our customers what to expect regarding support for ETC,” Coinbase Security Engineer Mark Nesbitt explained. “Coinbase takes security very seriously.”

Joining Coinbase in suspending Ethereum Classic trading was Kraken, formally known as Payward Inc. “As the 51% attack appears to be ongoing, we have temporarily halted ETC deposits and withdrawals,” the company wrote late today. “We will continue to monitor the situation, but will bring ETC funding back online only once we believe it is safe to do so.”

In a strange twist, the people behind Ethereum Classic at first denied that the attack had taken place, then sort of agreed that it did.

“Regarding the recent mining events. We may have an idea of where the hash rate came from,” a tweet from the official Ethereum Classic Twitter account reads. “Manufacturer Linzhi confirmed testing of new 1,400/Mh ethash machines #projectLavaSnow – Most likely selfish mining (Not 51% attack) – Double spends not detected (Miner dumped bocks).”

In a later tweet, Ethereum Classic stated that “to be clear we are making no attempt to hide or downplay recent events. Facts are facts and as the situation develops we’ll soon get a full picture of what actually took place. Linzhi is testing ASICS. Coinbase reported double spends; both may be true. In time we will see.”

Whatever the truth, investors were not impressed. The price of ETC dropped by 7.5 percent over the last 24 hours, according to Coingecko. That may not be entirely reflective of the market, however, given that Coinbase and Kraken have suspended trading so liquidity is significantly reduced.

Image: Ethereum Classic/Flickr