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Two Major Bitcoin Exchanges Fell Victim to Cyberattacks After Price Hits All-Time High

Two Major Bitcoin Exchanges Fell Victim to Cyberattacks After Price Hits All-Time High

Two Major Bitcoin Exchanges Fell Victim to Cyberattacks After Price Hits All-Time High

​On June 11, bitcoin price hit its new all-time high at $3,018. Sources revealed that major bitcoin exchanges including Coinbase and its trading platform GDAX struggled to deal with increasing demand from traders as bitcoin price surged. Coinbase in particular could not handle the abrupt increase in traffic and its platform was unavailable for several hours.

This week, sources including CNBC reported that major bitcoin exchanges including the largest US dollar-based bitcoin exchange Bitfinex and BTC-E fell victim to large-scale distributed denial-of-service (DDoS) attacks that left the two trading platforms unavailable for use temporarily.

Although Bitfinex and its development team mitigated the attack and resolved the issue within an hour since the DDoS attacks were launched, bitcoin trading platforms and exchanges are continuously being targeted by hackers globally.

Benjamin Roberts, co-founder and CEO of Citizen Hex, a digital currency trading platform backed by three Canadian venture capital firms, told bitcoin investors and traders that they need to be more cautious when utilizing trading platforms that secure bitcoin in centralized and private storages. Roberts noted that many centralized trading platforms were hacked in the past and users must distance themselves from unsecure exchanges.

"Investors with assets on centralized cryptocurrency exchanges should be careful. The track records of these organizations are not good, and as the assets on the exchanges grow, so does the bounty for attacking or hacking them,” said Roberts.

Most recently, $5 million was hacked from popular South Korean bitcoin exchange Yapizon. As a widely-utilized, reputable and highly profitable digital currency trading platform, Yapizon promised its users to recover user funds by distributing the company’s profits. The Yapizon team staated:

“Yapizon can certainly recover from the recent hacking attack. Yapizon entered the cryptocurrency industry four years ago and it is expanding services and operations rapidly across the region. From January to March of this year, Yapizon generated over $325,000 in profit and the company projects a total profit of $1.8 million by the end of 2017. If customers trust in Yapizon and its practices, the company believes it can make up for the losses of all customers relatively soon.”

As Roberts explained, an increasing number of bitcoin trading platforms and exchange are starting to be targeted by a variety of attacks. DDoS attacks merely paralyze trading platforms for several hours and they can be mitigated relatively quickly. However, Roberts encouraged cryptocurrency traders to ensure bitcoin or other digital currencies are stored in centralized platforms to prevent theft or hack.

Ark Investments blockchain products lead Chris Burniske told CNBC in an exclusive interview that the industry is not seeing many cases of bitcoin exchange and trading platform hacking attacks that result in loss of client funds. He explained that there exists a significant difference between attacks such as DDoS attacks and major hacking attacks that lead to the theft of user funds.

"There's a big difference between a denial of service attack, and a hack that causes clients to lose funds. As of yet, we're fortunately not seeing any of the latter."

Author : Joseph Young

Joseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.

Bitcoin exchange Bitcoin Victims Cyber Attack DDoS