Over the past few days, leading bitcoin exchange Kraken has tried to implement advanced DDoS protection, after a series of large DDoS attacks were launched by an unidentified group of hackers, directed to disrupt their operations.
According to the Kraken team, the attacks began on October 31, when an increasing number of users reported server issues and connection problems while logging into their Kraken accounts. The majority of its users were unable to access their funds and withdraw bitcoins due to gateway error and server glitches.
During this time, Kraken announced on Twitter:
The DDoS attacks continued in small doses until November 4, when the exchange was hit hard by a series of major DDoS attacks, resulting a significant delay in server connections for a few hours until the website finally went down for straight hours, enraging users who were hoping to withdraw their bitcoins as the price of bitcoin peaked US$500 on international exchanges.
The Kraken team quickly began to improve its security protocols and DDoS protection since yesterday morning to restore connectivity and resolve server issues. Kraken was able to quickly mitigate the attacks but warned its users that the DDoS is ongoing and some users may still not be able to access their accounts on the exchange.
While many suspect that the DDoS attacks could have been launched by anonymous hackers to drive down the price of bitcoin, BTCC exchange CEO Bobby Lee told Cointelegraph that:
“There was perhaps a perception that the attackers were trying to bring the price down, but as we don’t know who the attackers are we can’t be sure of their motives.”
Lee also believes that the attacks won’t have any significant impact on the price due to this attack. Kraken’s market share meanwhile is less than 5%, which is probably one of the main reasons why the market as a whole will be able to withstand any disruptions.
“Kraken’s volume is too little to have an effect on the price of bitcoin,” said one Kraken trader who asked not to be named to Cointelegraph. “Lots of people lost on the price drop.”
Head of Research at Brave New Coin, Tone Vays, also added:
"I personally don't think it had much affect at all, Kraken only accounts for less than 5% of the trading volume and it's very likely most of the traders have additional accounts on more liquid exchanges [...]. Anyone trading Bitcoin obviously expects volatility, but they also have to factor in technological issues at the exchange level. We are still years away from anything resembling a traditional professional trading infrastructure."