The Problem

Late last week an attacker exploited the Vertcoin (VTC) chain and successfully compromised the BTC/VTC market on the CryptoBridge exchange. This attacker was able to deposit a sum of VTC which subsequently disappeared from the blockchain after the number of required confirmations had been met. These credited VTC were then sold, creating a negative balance of VTC for that market.

Our team disabled deposits and withdrawals immediately once the irregularity was discovered. This was a necessary but undesired precaution and created friction between the exchange, its users and the VTC community. Due to the sensitive nature of the event, details were left undisclosed until a coarse of action was devised and the matter resolved. We appreciate the wariness that all involved and hope to clear the air with this announcement.

 

The Response

The Vertcoin developers were prompt in responding directly to our team. Once a full accounting of the events was shared, it was determined that the number of confirmations for deposit was insufficient and would be raised considerably. It has recently come to light that assets with lower hashrate are especially susceptible to such attacks and an audit to eliminate the possibility of this scenario has been completed to ensure the security and the validity of deposits onto the exchange.

Being that the Vertcoin development team is financed via donation, no emergency fund exists to aid in recompense for the attack. Therefore, the CryptoBridge team has elected to absorb 100% of the damage to ensure all legitimate depositors of VTC are able to retain their value. This unfortunate event was brought to an expedient resolution with the help of the Vertcoin team, and we would like to publicly recognize their professional response.

 

Moving Forward

As of this writing deposits and withdrawals have been re-enabled and the VTC/BTC market is operating as normal. The CryptoBridge team wishes to thank everyone for their understanding of the need to disable deposits and withdrawals for the duration needed to resolve the issue.