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Major DDoS Attack Against BitGo Shocks CryptoCurrency Community

Monday, February 27th, 2017

The cryptocurrency industry has grown by leaps and bounds in the last few years. From being an obscure mode of transaction accepted only by a handful of merchants, cryptocurrencies such as Bitcoins have become one of the favorite ways to transact anonymously on the web. As a matter of fact, there are over 200 cryptocurrencies in existence today and they are being used by netizens to buy/sell millions of dollars’ worth of goods and services every single day. Unfortunately, the rising popularity of cryptocurrencies have also made them a favorite target of hackers and cyber criminals. In early June’ 2016, attackers launched a major DDoS attack against BitGo which happens to be one of the most popular Bitcoin wallet services on the web.

Established in 2013, BitGo was the first company to launch multi-signature bitcoin wallet. Unlike other bitcoin wallets which use a single key for transactions, BitGo relies on its proprietary two-signature transaction technology. The solution not only makes transactions more secure, it also ensures that criminals are not able to steal bitcoins even if they manage to get access to wallet keys. BitGo has also incorporated 2-factor authentication and enterprise grade security to deliver virtually hack-proof Bitcoin transaction experience.

Apart from offering the above mentioned security features, BitGo has also developed a unique solution that provides near instantaneous confirmation of Bitcoin transactions. Earlier it used to take at least few hours to verify Bitcoin transactions but with the new technology, merchants can verify transactions in real time and deliver services to customers a lot faster. As a result, the BitGo wallet has also been integrated with many other bitcoin based financial services such as Wirex (earlier known as E-Coin), Kraken, Bitfinex, Bitstamp and Unocoin. For instance, Wirex relies on BitGo to drive transactions through Bitcoin-based debit cards.

The DDoS attack launched by criminals in the first week of June brought down BitGo services for almost four to five hours. A number of dependent services such as Wirex also went down as a result. BitGo tweeted an apology to its customers almost an hour after the attack began. Wirex also advised customers not to transact online until BitGo operations recovered fully. While BitGo was back in business after few hours, the news of the attack sent shockwaves through the cryptocurrency industry. Since cryptocurrencies are being used by millions to transact daily, any problems in the operations of major exchanges or wallet services can cause significant disruptions to the service providers.

The DDoS attack against BitGo clearly shows that criminals are targeting the cryptocurrency industry in a major way. Besides BitGo, many other cryptocurrency based service providers including CoinWallet, Shapeshift, Gatecoin, BitQuick and Cryptsy have suffered data breaches in the recent past. Several security companies have also reported that hackers are now offering DDoS services on rent on the dark web which can bring down operations of Bitcoin service providers. It is thus clear that cryptocurrency service providers must live with new reality and upgrade their security infrastructure in order to deal with such kind of security challenges.

February 27, 2017

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