CoinExchange Statement on Swisscoin (SIC)
Here is a summary of the events that have transpired regarding Swisscoin and CoinExchange.io.
What Happened
- On the 20th Of November we upgraded the SIC code at the request of the SIC developers.
- On the 23rd of November we were informed by several customers that a large amount of SIC been dumped on the market.
- We checked and noticed all buy orders had been filled down to 1 satoshi.
- We immediately put the SIC client into maintenance mode and froze the account of the user responsible.
- We then informed the SIC developers via email that their chain had possible problems and asked if they could please let us know if the coins that were dumped were legitimate.
- The SIC developers responded to us and informed us the coins were not legitimate. They were quick to acknowledge that there was an issue with the code and stated that their chain had been ‘hackattacked’. They further requested that we deploy an update to the SIC code which would invalidate the coins that had been mined.
- We informed SIC there would be a deficit if the chain was rolled back. SIC responded to question whether we would need the full deficit sent to one of our accounts which we confirmed.
- We restarted the SIC market because we believed that the matter would be solved at no detriment to users and because many users insisted we re-open the market.
- We then sent the SIC developers a full run down on all of our SIC balances, including those of the user whose account we had frozen.
- At this time our client balance was 519,269,463.97511727 SIC with a deficit of 14,506,551,779.68298273 SIC.
- SIC then responded telling us that they would no longer be able to provide us with the missing coins.
- We then decided to look into exactly how this issue occurred.
- There was no source history available on Github so we compared our own copies of the code.
- Two coin developers assisted us in independently examining the source code provided on the 20th of November. Both quickly identified that POW mining had been re-enabled between block 303256 and 305260.
- It is clear the SIC developers published their code publicly on Github on the 20th of November with POW mining re-enabled. This meant that anyone who downloaded the updated code could partake in mining at the same time.
- On the 23rd of November someone other than SIC did start mining and managed to mine approximately 40B coins. These were the coins that were deposited into CoinExchange.
- It then follows that there was no “hackattack” on the SIC chain, mining had simply been re-enabled.
Proposed Solution
- We initially proposed several possible solutions to this issue.
1 — Fork the current SIC chain and introduce the deficit coins. No further disruption would be necessary.
2 — Create a new SIC coin (e.g. SWC) and credit all users who currently hold SIC balances on CoinExchange with SWC. We would subsequently return the balance of our SIC coins to Swisscoin.
- We held and still do hold the belief that the best course of action would be the first option, to fork the SIC chain and introduce the missing coins. We feel that this is the simplest, most logical and fairest approach to insure users incur no loss.
- The amended second solution proposed by SIC would involve two steps. Step 1 would be to fork SIC into a second coin (e.g. SWC). All users who currently hold SIC balances on CoinExchange would receive an SWC balance equivalent to their current SIC balance. Step 2 would be to restore the original SIC balances to users prior to the introduced coins being deposited.
- Independently of the proposed solutions and pending additional inquiries into the legalities of this matter we may be able to proportionately distribute the frozen funds in BTC of the user responsible to all current holders of SIC on CoinExchange.
In Conclusion
- CoinExchange was not hacked as has been suggested.
- These issues were a direct result of changes made to the SIC code.
- In order to attempt to satisfy the interests of our users we have enabled a means for current holders of SIC on CoinExchange to vote on their preferred solution. We will publish the results of this vote publicly.
- We pledge to honor the chosen solution.
Finally
- We apologize for the delay in resolving this issue. We hope this record of events helps to explain matters to all interested parties and clarifies the situation. Hopefully this also addresses a number of negative claims that have surfaced on social media.
- Moving forward we welcome a speedy resolution to these matters.
