Major Bitcoin Exchanges Hit By Cyberattacks As Record Rally Makes Them A Target

CNBC reported that:

• At least two major bitcoin exchanges reported cyberattacks this week.
• The attacks were ‘denial-of-service’ in nature and did not affect clients’ funds.
• Bitcoin briefly more than tripled for the year when it topped $3,000 last weekend.

Bitfinex, the largest U.S. dollar-based bitcoin exchange and smaller BTC-e’s exchange were the alleged victims of the breaches.

Ilia Kolochenko, CEO at High-Tech Bridge:

“Speaking about growing DDoS attacks against Bitcoins stock exchanges and other infrastructure companies, they are likely conducted to influence Bitcoin exchange rate (in USD) by unfair traders and speculators. Such wild speculative tactics and the ease of the attacks reminds me 1929 in the US.

At this moment, I’d avoid spending a single dollar on a [digital] currency which exchange rate can be manipulated by a DDoS attack accessible to anyone on the Black market (amusingly, mainly available for the Bitcoins). In the future, we should expect more major attacks against stock exchanges aimed not only to steal people’s funds, but to bear Bitcoin exchange rate for the speculative interest of some traders.

Decentralization is one of the major advantages of blockchain technology that is inherited by Bitcoin. However, it is actually one of its biggest risks and challenges as well. Many people see Bitcoin as a freedom from unnecessary governmental control, over-regulation and bureaucracy. However, once their wallet is compromised and cryptocoins are stolen by cybercriminals, they usually complain to law enforcement agencies seeking justice and protection. Unfortunately, the technology on which Bitcoin is based, does not allow to abrogate any of the previous transaction by any court order – it’s mathematically impossible.”