Posted on April 30, 2020 at 12:04 PM
Binance, the world’s largest cryptocurrency exchange has been the victim of DDoS attacks recently. The exchange was attacked yesterday, and the Cheif Executive Officer, Changpeng Zhao (CZ), has blamed it on “self-perceived Competitors”.
“Based on the attack pattern, it looks like work of our self-perceived competitors,” he said in a Twitter message yesterday.
He further tweeted that Binance Exchange has employed white hackers who are working on internal testing to keep the platform more secure.
He was responding to tweets that suggested Binance should have hackers who would be testing the security structure of the exchange and find any loophole before the dark hackers do.
A tweet suggested that Binance should follow the footsteps of global tech companies like Facebook and Google, who employ white hackers to help them keep their systems more secure.
In addition to the response, CZ tweeted that his company has such hackers too, as well as self-perceived competitors who are doing testing for the exchange.
Attack was first reported by Co-founder, Yi He, earlier yesterday.
Reports revealed that Yi Hi, co-founder of Binance, initially reported the attack earlier in the day. However, as of the time of writing, Binance has not officially released a statement regarding the attack.
CZ revealed that the Chinese Domains of the exchange have been having some issues lately, and the conventional hackers are not responsible. He said some competitors are trying to disrupt the exchange’s portal and discredit it in the eyes of clients. CZ said the exchange platform is now up and running
Crypto exchanges increasingly becoming targets
The development is coming after top cryptocurrency exchange, OKEx, was recently attacked. It was reported that there were a series of DDoS attacks on the exchanges in February, leading to some key system outages. The exchange closed down its portal before resuming after setting up some servers.
As a result, Jay Hao, OKEx CEO, said some unnamed competitors were to be blamed for the attack. OKEx revealed that the attack was not damaging to the platform because it was significantly dealt with before it could cause any severe damage. It further revealed that no overseas client was affected by the attack.
Just last month, the BitMex exchange suffered an attack during the epic crash on Black Thursday. It resulted in massive liquidation, which caused several traders to suffer great losses. Like OKEx, the BitMEX exchange said competitors are responsible for the attack. However, many observers disproved the assertion and said BitMEX caused the attack on purpose.
With these series of attacks, stakeholders in the industry believe both attacks could be possibly linked.
Some observers have a different opinion on attackers
The nature of the attack and its purpose has led CZ to blame it on exchange competitors, especially those based in China.
As CZ has already revealed, users and clients should not worry about the attack because their funds are safe and the exchange has since patched the attack.
But some observers who are commenting on the post by CZ stated that the attack could not have come from competitors. According to them, Binance has no real competitors that could think a DDoS attack would harm Binance.
In their opinion, the attack could be a mistake from within, and the only way to save face is to blame it on competitors.
Recommendations against using centralized platforms
DDoS attacks are carried out to overload servers, preventing the users to access information from the servers. So, anyone that wants to withdraw or trade on the platform cannot do so, leading to a high drop in trading volumes.
In any case, the recent attacks show the danger of keeping funds in a centralized platform like Binance. Whether a loss has occurred or not, it’s a fact that users cannot access the platform. That means their accounts will stay frozen until the issue is resolved, as was the case with DeFi a few weeks ago.
As a result, stakeholders have recommended not keeping crypto funds on a centralized platform to avoid losing funds due to external attacks or technical issues.