The issue was confirmed by James Wo, founder of Ethereum Classic Labs and also by core Ethereum Classic team through official Twitter page. Without much of a delay a detailed analysis report was published detailing the nature of issue and the miner who caused the problem.
The report suggested miners to “Continue mining the chain as-is,” further stating than any trades carried out during the earlier 12-hour period were not carried out in the same manner they had to be, but will get submitted again in the mempool.
There is a problem on the Ethereum Classic (ETC) blockchain. Exchanges need to pause deposits and withdrawals.
— Hudson Jameson (@hudsonjameson) August 1, 2020
Another state of affairs report published by the core team underlined that the reorg was not carried out deliberately, but due to 12 hour downtime and issues with old software.
Hi everybody, @etc_core is working on it now, please kindly wait for the response from the core team. No worries, it will be solved. Exchanges need to pause deposits and withdrawals now. https://t.co/5CrrLNDHax
— James Wo (@realjameswo) August 1, 2020
As proposed by a mining related tools provider Bitfly, a reshuffling of 3693 blocks had taken place in the network at block 10904146. Bitfly stated “This caused all state pruned nodes to stop syncing.”
Today the #ETC chain experienced a chain reorg of 3693 blocks at block 10904146. This caused all state pruned nodes to stop syncing. It is likely caused by a 51% attack and all exchanges are advised to halt deposits & withdrawals immediately and investigate all recent tx. pic.twitter.com/lUNtifaBWT
— Bitfly (@etherchain_org) August 1, 2020
The incident was initially believed to be a network attack, even though the theory was later brushed away by the core group behind ETC. At the beginning of last year, a 51% attack did take place on ETC, increasing worries about the PoW (Proof-of-Work) mining protocol.