Indodax Firo (ZCoin) 51% Attack

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Indodax

Indodax is a leading cryptocurrency exchange in Indonesia, and Firo is a privacy-based Proof-of-Work blockchain. The Firo blockchain was weeks away from launching a chainlock feature when they were 51% attacked. The attacker attempted to double-spend coins through Binance.

As a result of the attack, the Firo team released an update which locked the attacker's address, and after a community vote, underwent a hard fork upgrade to return funds to affected exchange platforms. Therefore, there were no losses in the end.

This is a global/international case not involving a specific country.

About Indodax

"Indodax is Indonesia’s largest crypto asset marketplace, the perfect place to trade your crypto assets. With 4,606,047 verified members, you can trade your crypto assets, including Bitcoin, Ethereum, Ripple, and many more, hasslefree! Fast, secure, and easy. Join now and secure your profit by trading on Indodax!" "Every transaction is protected with Multi-factor Authentication, combining email verification and Google Authenticator SMS to guarantee that your transaction is truly signed and validated only by you."

"Anonymous cryptocurrency Firo — formerly known as Zcoin— is the latest Proof-of-Work coin to suffer a 51% attack." "Firo (FIRO), formerly known as Zcoin, is a cryptocurrency that focuses on being private digital cash. It created the Lelantus privacy protocol which allows users to burn their coins and redeem them later for brand new ones that do not have any transaction history."

"Prior to Lelantus, it was also the first cryptocurrency to code and launch a practical implementation of the Zerocoin protocol which became one of the most prevalent privacy protocols in use, prior to it being replaced by Sigma and then Lelantus after cryptographic flaws were discovered in the Zerocoin protocol in 2019."

"The founder of Firo (then Zcoin) is Poramin Insom. He earned a masters degree in Information Security from Johns Hopkins University where he wrote a paper on a proposed practical implementation of the Zerocoin protocol. Aside from Firo, he is also a co-founder of the Satang Corporation and has served as second lieutenant with the Royal Thai Armed Forces in its cyber warfare division."

"Reuben Yap joined the project shortly after its launch in 2016 and now leads the project in its overall strategy, development and research goals. Reuben has been a vocal advocate of online and financial privacy, having founded one of Southeast Asia’s earliest VPN services to combat censorship and is a well-respected speaker on the topic, with featured commentary in CoinDesk, BBC, Forbes, Nasdaq, Reuters and Cheddar News, among others. He assumed the role of Project Steward & Co-Founder in November 2019."

"Tweeting on Wednesday, Firo revealed that the protocol had come under a 51% attack and advised holders to pause all transactions until the network returns to a normal state." "The attack was done at a time where most of our team was asleep and we were first made aware at 6:50 AM UTC+8."

"We are under 51% attack at the moment. We recommend not to make transactions during this time until the network returns to a normal state. We will post updates when we have them. Note this is not a coding error but a nature of PoW. $XZC $FIRO"

"XZC(FIRO) 51% attack, 306 blocks rolled back, to 2021-01-18 17:24:20(UTC). Another messy situations."

"The attacker deposited a huge number of coins into Binance, sold them for other coins (most likely BTC, ETH and USDT) and withdrew the proceeds to a personal wallet. This was done with 3 unique KYCed IDs in batches of 10,000 FIRO to 40,000 FIRO totaling 865,951.9714 FIRO."

"Through his own pool, the attacker then revealed his secret mined chain which had more accumulated work on it. This chain rolled back over 300 blocks which also reversed his deposits (and other users’ deposits) into Binance. This meant that the FIRO that were sold on Binance were no longer on Binance and had reverted to the attacker despite him already selling them and withdrawing his BTC/USDT/ETH proceeds."

"The team moved swiftly and put out several emergency updates. The first of which freezes the attacker’s funds so they can’t be moved and also implemented a max re-org depth of 5, and the second will activate chainlocks within a week (at time of writing). The Firo development team is confident in our work, and hope that this activation will be successful and prevent any further attacks similar to this one."

“Exchanges are the ones at a loss as the attacker had deposited funds which have now been reversed because of the 51% attack. We are still working with exchanges to resolve the matter. From what we know at the moment both Binance and Indodax were affected.”

"Attacker consolidated all his FIRO in one address 54 totalling 867,652 FIRO which includes his coinbase rewards he earned from mining the chain. The attacker did not take any steps to anonymize or spread out his funds."

"We are working with exchanges and pools currently. Chainlocks that would have prevented this were being tested on testnet and was weeks away from deployment."

"Indodax has reported losses of 82,741.37718628 FIRO. We are unsure if these are knock on effects of legitimate users withdrawing from Binance to Indodax which are now subsequently reversed. It is possible that once Binance is made whole, Indodax losses would be made good as well."

"v14.3.0 hotfix wallet has been released. Please upgrade all Wallets and Masternodes as soon as possible." "LLMQ chainlocks are being activated soon! Please update to our latest wallet release v.14.4.0 as soon as possible!"

"We have published a post mortem of the 51% attack on Firo and are also asking for users to weigh in on what should be done moving forward. Please let your voice be heard!"

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Indodax Firo (ZCoin) 51% Attack

Date	Event	Description
January 19th, 2021	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $400,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

51% attacks can be prevented through a mix of increased block confirmation times and setting checkpoints to prevent large-scale reorganizations. This means the exchange will not credit newly deposited funds, and nodes will be prevented from accepting attacking chains.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.