Cryptocurrency exchange Bitfinex temporarily suspended trading on Tuesday over what was a cyber-attack on the platform.
Bitfinex, one of the world’s largest cryptocurrency exchanges was hacked early on Tuesday and the effect of this attack was felt throughout the industry. Following its announcement over the breach, bitcoin prices dropped by 2% hitting a low of USD $7,373.47. The price drop came as the market panicked in fear of losing their bitcoins to the attack.
The company that was founded 6 years ago in Hong Kong has been a victim of hacking before and at times the result has been catastrophic. The company has suffered a few security breaches over the years, a story shared among many cryptocurrency exchanges. Last June, the company was among the targeted exchanges but was fortunate not to lose data. Again in 2016, Bitfinex was hacked, an attack in which it lost nearly 120,000 bitcoins!
Was data stolen?
“The attack only impacted trading operations, and user accounts and their associated funds/account balances were not at risk at any point during the attack,” a Bitfinex spokesperson told CNBC. The attack was what is known as a DDoS, or a distributed denial-of-service attack, which overwhelms a system with multiple virus-infected servers. This came as a relief to its platform users who had begun to panic after trading was paused.
Is it still safe?
Several hours later, the exchange was back to normal operations with no damage to user accounts. Now Bitfinex says its team of developers is ‘monitoring the situation closely.’
For Bitfinex, this will be the third time hackers have challenged the platform’s security and will act as a reminder to every exchange that security is still a vital aspect of any successful exchange.
Following the hack, rumors have emerged North Korea might have been involved in this latest attack. The rumors may however not be unfounded with the past year seeing several crypto exchange hackers tracked back to the country.
Cryptocurrency exchanges have been targeted for a long time with the first major hack happening 4 years ago. Tokyo-based Mt. Gox lost over 850,000 bitcoins and had to file for bankruptcy marking one of the largest hacks in cryptocurrency history.
The latest companies to suffer security breaches are Slovenia-based crypto exchange NiceHash which lost over 4,700 bitcoins and South Korea’s Bitcoin exchange YouBit which lost 17% of its net value.
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