Bitfinex Down? Cryptocurrency Exchange Hit By DDoS Attack

Bitfinex, the largest digital currency exchange in the world by volume, reported Tuesday that it was suffering from a distributed denial of service (DDoS) attack that has resulted in the service being unavailable.

The Hong Kong-based exchange started experiencing the attack around 9:45 a.m. ET. It is the second time in the last week that the platform for buying and trading cryptocurrencies has allegedly been under attack.

The attack came just one day after the United States Securities and Exchange Commission issued a warning regarding the safety of digital currency trading. SEC Chairman Jay Clayton warned traders that many markets remain unregulated and lack protection.

"These markets span national borders and that significant trading may occur on systems and platforms outside the United States," SEC Chairman Jay Clayton, who was appointed to the position by President Donald Trump, said Monday in a statement .

"Your invested funds may quickly travel overseas without your knowledge. As a result, risks can be amplified, including the risk that market regulators, such as the SEC, may not be able to effectively pursue bad actors or recover funds," Clayton said.

Despite—or perhaps because of—Bitfinex’s size, the business has long drawn the ire of cryptocurrencies traders. Bitfinex has been accused of shady business practices before, including rumors of a collaborative effort between the Hong Kong company and cryptocurrency startup Tether to commit fraud and market manipulation .

Last year, Bitfinex lost more than $65 million after suffering a security breach that allowed hackers to steal 119,756 bitcoin. Earlier this year, Tether suffered a similar fate, experiencing a breach that resulted in nearly $31 million being stolen .

Given the shady history of Bitfinex and its alleged partners, it would be no surprise that the exchange would find itself in the crosshairs of attackers. Denial of service attacks are generally focused efforts launched against an individual or organization. While the origin of the supposed attack against Bitfinex is unknown, it is likely safe to assume it is a targeted and intentional attack.

In a denial of service attack like the one Bitfinex has experienced, an attacker attempts to overwhelm the systems of its victim by directing a massive amount of traffic at their servers. The attacks are typically carried out by bots or by compromised machines that are directed to send wave after wave of requests to a specific destination in order to knock it offline or make it inaccessible to others.

Bitfinex claimed to suffer a similar attack last week. It announced the issue on December 7 but claimed the campaign had been ongoing for several days. The company eventually recovered from the issue once the attack stopped.

Thus far, the company appears to be unable to maintain its services when attacked. That presents issues for cryptocurrencies traders who rely on exchanges being fast and reliable in order to capitalize on the rapid fluctuations in currency value.