BCH May Have Sustained $1.3 Million+ Double Spend: BitMex Research
New report says after its hard fork on May 15, bitcoin cash experienced a 2-block reorganization possibly resulting in a 3,392 BCH (over $1.35 million) double spend.
Following its hard fork on May 15, bitcoin cash (BCH) appears to have experienced a two-block chain reorganization resulting in a 3,392 BCH (about $1.35 million at press time) double spend. The claim was made in a report released by the research arm of cryptocurrency derivatives exchange BitMex on May 24.
Per the report, the recent BCH hard fork experienced three interrelated issues. Firstly, an apparent bug evidently exploited by an attacker right after the hard fork. The attacker was able to “broadcast transactions which met the mempool validity conditions but failed the consensus checks.” Miners attempting to produce blocks with said transactions were not able to, instead producing empty blocks.
The empty blocks reportedly resulted in concern among miners who “may have tried to mine on the original non-hardfork chain, causing a consensus chainsplit.”
The third interrelated problem was that the consensus chainsplit reportedly prevented a system meant to recover funds accidentally sent to SegWit addresses from functioning. According to BitMex Research, “[t]his failure may have resulted in a deliberate and coordinated 2 block chain re-organisation.”
The report claims:
“Based on our calculations, around 3,392 BCH may have been successfully double spent in an orchestrated transaction reversal. However, the only victim with respect to these double spent coins could have been the original ‘thief.’”
As BitMex Research reports, the above three issues during the hard fork resulted in 25 transactions (moving 3,392 BCH) not being included in the reorganized chain, which constitutes a double spend.
As Cointelegraph reported at the time, the bitcoin SV (BSV) blockchain — the result of a previous BCH hard fork — struggled with its large block size following a series of block reorganizations in April.