“There is an impact on the short-term price of bitcoin from the attacks,” Xin Chen said. “The attacks were simultaneously carried on OKCoin, Huobi, Bitfinex and perhaps others. It costs resources to carry out a DDOS attack and it is likely in our estimation that the malicious attackers acted with the intent to influence the price of bitcoin. However, since DDOS attacks are commonly faced by Internet services, the long-term influences on the bitcoin price is not serious.”
“We are trying our best to upgrade the system, both the software and hardware,” Xin Chen continued. “What we can do is address three things. First, to reduce the impact of attacks; second, to increase the difficulty to attack; and third, shorten the recovery time. Unfortunately, there are no absolutes against DDOS attacks and we cannot make promises that this kind of event won’t ever happen again.”
Xin Chen was unable to say how many users suffered losses due to the attack, adding,
OKCoin.com platform suffered no direct losses due to the attacks. This is not a hacking but a DDOS attack.
OKCoin has posted an explanation of the July 10 attack and the actions it took to minimize the damage on its website. It has created a fund to compensate users for losses caused by the attack and has also pledged to increase its investment in countering DDOS and CC attacks.
“While no internet service can 100% guarantee it is immune from the effects of DDOS and CC attacks, we can and must do better,” the exchange noted on its website. “We will increase investment in countering DDOS and CC attacks and improve our network infrastructure,” the statement said.
The exchange said it will provide information about the attack to the police.
“Large-scale” DDOS and CC attacks began against OKCoin’s Chinese platform OKCoin.cn and international platform OKCoin.com on July 10. The intent was to exhaust the platform’s server and bandwidth capacity. Another purpose was to block users from accessing the platform.
“Fortunately, OKCoin had purchased significant resources capable of defending against attacks, and only the Chinese platform’s K-line was unable to load, with all other aspects unaffected.”
At 17:00 on July 10, the attackers began targeting the international platform with greater force. OKCoin responded by switching to a highly-secure server and “counter CC attack measures.” Switching to the highly-secure server allowed a large number of users to continue to access the site for most of the time. Some users were not able to access the platform, however.
Price became volatile during the attack.
By 17:19, transaction volumes returned to normal as the international platform became accessible.
OKCoin acknowledged that some users could not access the platform despite the fact that emergency response measures were in place. “When attacked, OKCoin will immediately switch the network over to a highly secure server. However, the DNS switchover takes time to go into effect. CC protection tactics also require some time to begin. This is why some users will be affected and be unable to access the platform.”
The exchange will purchase 1,000 bitcoins and will also use 1,000 bitcoins from the “clawback and vicious attack insurance” fund to create a 2,000 bitcoin incident compensation fund. For those who suffered losses from 17:00 to 17:19 on July 10 as a result of not being able to access the platform, OK Coin will compensate based on realized losses.
“OKCoin will from Monday, July 13th 10:00 begin contacting the aforementioned user group. Users may also independently reach out to us via the contact info: 4006609037.”
“This compensation in this instance is a one time measure as we put further improvements in place. This decision is not to be viewed as a precedent.”
In response to a user question, the exchange said it did not block users from accessing the platform to manipulate the market. Doing so has no benefits for OKCoin. “The value of the entity and the brand of OKCoin is immeasurably more valuable than any gains to be had from manipulating the platform under any logic. OKCoin is like its users, a victim of this attack.”
In response to another question, “Why not directly put the entire platform on the highly secure servers all the time?” OKCoin said highly-secure server speeds “are not up to par.” Most Internet companies respond to attacks by routing traffic to highly secure servers until attacks subside.
Asked why trades continued during an attack, the exchange said it switches users to the highly-secure server at different times. In addition, limit orders placed prior to the attacks can be executed as normal.
When an attack leads to a platform malfunctioning, it is not easy to solve the problem by halting trading or closing the market, the exchange said.
The digital currency industry is still in its early stages and there exists infinite room for further development. However, it also has less than perfect foundations as its shortcomings. The risks and opportunities in trading digital currencies are both extremely outsized. For these reasons, investors and traders should be cautious and aware of the risks involved.
Featured image from Shutterstock.
Last modified (UTC): July 14, 2015 15:30