Cryptocurrency Verge Hacked for Second Time in Two Months

The anonymity-focused cryptocurrency suffered a second attack since the beginning of April, losing 35 million XVG.

by Nina Dimitrova
23 May • 2 mins
In News

Verge (XVG), an anonymity-focused cryptocurrency, has experienced a second hack in less than two months in an attack that lasted hours resulting in the loss of 35 million XVG, worth approximately USD 1.7 million. In a Tweet from May 21, the developers of the project admitted that some mining pools are under a distributed denial of service (DDoS) attack and the Verge blockchain is experiencing delays. “We are working to resolve this”, the developers added.

According to posts in popular forum, some users noted in the thread about the April hack of Verge, that the issue may be more serious. According to the user Ocminer, the Verge developers did not do much to fix the problems that were exploited by the previous hack.

The attacker(s) were using two mining algorithms to fork the chain for their own profit. This type of hack is called a >51% attack, where hackers take over more than half of the computing power (hashrate) to mine a currency. It is an exploitation of the proof-of-work (PoW) protocol, in which the majority of miners agree on the history of transactions and verify them.

The hack stirred up discontent in the Verge community and prompted criticism by some users. In a Reddit thread some said they will abandon XVG and find other projects to invest in.

Verge, launched in 2014, focuses on privacy and anonymity. It is based on the Bitcoin blockchain, with an additional security layer. This April XVG sparked some significant user interest by signing partnership deals with adult content sites Pornhub and Brazzers who now accept payments in XVG.

The attack on this coin is similar to that on Monacoin, a Japanese cryptocurrency that suffered a selfish mining attack, in combination with a >51% attack. However, Monacion’s losses were not as significant – around $90 000.