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Cyber attacks on bitcoin exchanges are surging as the cryptocurrency soars in value

The soaring price of bitcoin has prompted an unprecedented surge in the number of distributed denial of service attacks on bitcoin exchanges, researchers have revealed.

Over the last quarter, the cryptocurrency became one of the top ten most DDoS’d industries, according to new research from Imperva. Bitcoin now sits alongside the gambling, banking and online retail sectors in the cyber security firm’s ranking.

“There are only around 70 bitcoin exchanges,” says Imperva’s Igal Zeifman. “If you consider how many banks there are, how many e-commerce sites there are, that’s pretty surprising.”

Zeifman and his colleagues found that nearly 75 per cent of their bitcoin client list, which includes some of the largest exchanges, faced DDoS attacks over the three month period.

“It’s the first time we’ve tracked it statistically,” he says. “What drove us to focus on it is that it’s the first time we’d seen so many attacks.”

The price of bitcoin nearly doubled between the start of July and the end of August, and has continued to soar since, exceeding $11,000 for the the first time last weekend. Imperva’s researchers believe the surge in attacks is linked to the coin’s rising value.

“They are related directly to the price spikes,” says Zeifman. “It’s definitely ‘a follow the money methodology’. It’s going to attract extortionists.”

“We observe it occurring but we also block it. I didn’t see any of our customers getting an extortion email but that’s because their motive is to attack a target, bring it down and then send an email saying: ‘I attacked you today for 20 minutes but tomorrow I’m going to come back.’ If the original attempt is not successful they won’t do that.”

But Zeifman believes that another factor unique to the bitcoin sector is also at play: “Some attacks are used as a way of manipulating coin prices.

“In 2013, we mitigated one of the largest attacks at the time against BTC China. Their CEO actually talked about the reasons why he thinks those attacks occurred and for him, he wasn’t concerned about extortion or the competitive element, as we often see in those attacks, it was about the manipulation of prices.”

Bitcoin’s value might be spiralling, but the industry remains small. “Hitting one of those top ten exchanges, taking it offline, it has an impact on the entire bitcoin market,” says Zeifman. “Prices being as high as they are, that’s a significant amount of money if you want to make a trade.”

The rise of attacks on bitcoin exchanges has also coincided with the emergence of stronger attacks. In the first quarter of the year, Imperva researchers spotted just six attacks that exceeded 100 million packets per second. In the latest quarter, they observed 144 – 3 per cent of the total.

Zeifman predicts that the number and severity of attacks will only increase over time: “There are a lot of resources available out there for attackers to hijack, so there is no reason not to try and try and try again.”