Bitcoin spinoff Bitcoin Gold is in a spot of bother after leading U.S. exchange Bittrex Inc. announced that it would delist the cryptocurrency starting Sept. 14 following a May attack on the Bitcoin Gold blockchain.

Cryptocurrencies come and go on a regular basis and barely make headlines, but Bitcoin Gold’s current drama is a different case because it involves a form of attack that resulted in substantial losses and a subsequent dispute that lead to this point.

Bitcoin Gold itself was a hard fork of regular bitcoin launched in October last year that promised to “make bitcoin decentralized again.” A hard fork in cryptocurrencies is where a person or group takes the blockchain on one cryptocurrency (in this case bitcoin) and creates its own with code variations or regressions.

In the case of most hard forks, the holders of the original currency obtain credit in the new forked cryptocurrency. That means that where exchanges supported it, users obtained the equivalent amount in Bitcoin Gold, giving the cryptocurrency an immediate user base.

Fast forward to May, and people unknown targeted Bitcoin Gold with a 51 percent attack, an attack where an organization or people can control the majority of a given crypto’s network mining power, or hashrate. Having achieved a 51 percent share, the attacker can then manipulate the blockchain ledger on which transactions are recorded, including sending the same digital coins more than once. That’s exactly what happened in May.

According to a report from the time, those behind the attack were able to steal $18 million in Bitcoin Gold through “double spends” — that is, sending the same digital coins twice thanks to their 51 percent control of the hashrate — allowing them to verify the double transaction.

That attack is the center of the dispute between Bittrex and Bitcoin Gold today. Bittrex is seeking compensation, reported to be more than 12,000 BTG ($265,000), for its losses in return for continuing to list BTG, whereas Bitcoin Gold said it holds no liability.

In a statement Saturday, Bitcoin Gold contradicted itself, saying both that “the attacks on exchanges in May were not the result of any fault or flaw in the BTG blockchain or code…. The attackers bear responsibility for their attacks.” It also said that “the Bitcoin Gold team is not responsible for security policy within private entities like Bitrex [sic]; those who earn revenue running a private business must manage the related risks and are ultimately responsible for their own security.”

Bittrex is not the biggest exchange supporting Bitcoin Gold transactions but it is a significant one.

The problem for Bitcoin Gold, aside from its muddled, semiliterate messaging, is one of trust and perception. That a significant exchange would withdraw support is a sign to the market that all is not well with Bitcoin Gold no matter how much those behind it say otherwise.

Liquidity is key to the success of any cryptocurrency, and that liquidity includes broad exchange support. If one exchange pulls support for Bitcoin Gold, could other exchanges follow? That’s the question traders holding Bitcoin Gold will be asking, since fewer exchanges mean fewer buyers and therefore lower prices thanks to lower demand.

Image: Bitcoin Gold