Controversial crypto exchange Bitfinex has sparked panic among its users as the exchange suddenly went down for unscheduled maintenance. Before the community started speculating about the situation, the exchange announced on twitter that it might have undergone a distributed denial-of-service (DDoS) attack.
A DDoS attack is one of the lethal weapons used by Hackers. The attack targets websites and online services, in this case, a cryptocurrency exchange. The aim is to overwhelm the target with more traffic than the server or network can accommodate. The goal is to render the website or service inoperable.
Thirty minutes into the incident, the exchange informed all its users that the platform has resumed services, claiming to have resolved all issues relating to the attack. The company further added that it has implemented “stricter protection” to prevent attacks like this.
Bitfinex CTO, Paolo Ardoino took to twitter to assure customers that there has been no loss of funds. He wrote:
Crypto industry plagued by hackers
The cryptocurrency industry doesn’t seem to be able to catch a break from the cyber-attacks. Bitfinex got lucky, as those behind the attack did not manage to get away with the funds. However, this isn’t the case most of the time as the crypto industry has seen billions lost in hacks. Every major crypto exchange that existed has been attacked at least once.
A report from blockchain analysis platform Chainalysis states that 2019 saw more than 11 major hacks and the hackers managed to steal more than $283 million in cryptocurrency assets. The previous year saw $875.5 million stolen from just six hacks.
Recently, the DeFi market lost more than $900,000 to two consecutive hacks on popular decentralized lending protocol bZx. The news followed an attack on Italian crypto exchange Altsbit, after its hot wallet had been breached earlier in February. The hack forced the exchange to shut down operations permanently.
Are Decentralized exchanges the answer?
As reported earlier by The Daily Chain, Centralized exchanges are not the best of places to store crypto assets. Events like this alongside many others are perfect examples of that. Anyone storing their assets in a centralized exchange is putting their faith in the organization. Even the smallest of bugs or errors on the part of the exchanges could lead to unrecoverable damage.
Decentralized exchanges have some basic advantages like enhanced Privacy due to no registration requirements or KYC process, no deposit or withdrawal is required, and all the transactions are handled by secure smart contracts, and most importantly, no single point of failure, control or regulation.