Why Is a Double-Spend Attack More Profitable When Targeting a Centralized Exchange? ⎊ Path

Why Is a Double-Spend Attack More Profitable When Targeting a Centralized Exchange?

A double-spend attack is most profitable when targeting a centralized exchange (CEX) because CEXs provide the necessary liquidity and finality to convert the double-spent coins into a different, more secure asset (like Bitcoin or a stablecoin). The attacker deposits their coin, quickly trades it, and withdraws the new asset before the exchange realizes the initial deposit transaction has been reversed on the blockchain.

The CEX acts as the crucial off-ramp, allowing the attacker to monetize the attack's proceeds.

How Does the Price Volatility of the Coin Affect the Attacker’s Risk-Reward Calculation?

What Are the Key Differences between a SAFT and a Traditional Convertible Note?

How Is ‘Wash Trading’ Detected in a Derivatives Market?

In a CEX, How Is ‘Internal Front-Running’ Detected and Punished?

How Does the Introduction of Regulated Financial Products like Bitcoin ETFs Affect Market Stability?

How Can Decentralized Exchanges (DEXs) Impact Altcoin Liquidity Compared to Centralized Exchanges (CEXs)?

What Is a “Double-Spend” Attack and How Do UTXOs Prevent It?

How Do Centralized Exchanges (CEXs) Manage Under-Collateralization Risk Differently?

Glossar

Centralized Exchange

Intermediary ⎊ This refers to a regulated or semi-regulated entity that acts as a trusted third party, facilitating the custody of client assets and the matching of buy and sell orders for cryptocurrency and associated derivatives on a centralized order book.