DDoS attacks on cryptocurrency exchanges, mostly located in the Asia-Pacific region, rose significantly in Q4, even beating the total number of cyber attacks on organisations in the financial and publishing sectors.
According to security firm Imperva's Q4 2017 DDoS Threat Landscape report which was published Thursday, cryptocurrency ranked as the fifth most attacked industry with DDoS attacks in Q4 2017, thanks to exchanges being targeted by hackers looking to profit from a major surge in the value of Bitcoin and other cryptocurrencies.
Bitcoin was also the most targeted cryptocurrency in the fourth quarter, featuring as the eighth most targeted industry. Attacks on cryptocurrency exchanges spiked even as the total number of such exchanges grew from a mere 70 in Q3 to 190 in Q4, thereby giving hackers more targets to choose from.
"The increase in attacks against bitcoin-related sites is likely linked to a growth spike experienced by the industry late last year when cryptocurrency prices reached an all-time high. As prices have since subsided, it will be interesting to see if the overall number of attacks declines as well in the coming months," noted Imperva.
Cyber criminals cashing in on the surge in cryptocurrency value
The increasing trend of cyber attacks, particularly DDoS attacks, on cryptocurrency exchanges did not evade the attention of security experts or those who invested their money in such exchanges, as some of these attacks resulted in the loss of millions for those who participated in ICOs.
For instance, in December last year, popular South Korean cryptocurrency exchange Youbit was forced to declare bankruptcy after a major cyber-attack on its servers wiped out 17% of its overall assets. Following the attack on its servers, Youbit announced that it had halted all deposits and withdrawals and that it would disburse all cryptocurrency in its possession.
Around the same time, Bitfinex, the world's largest cryptocurrency trading platform, said that it suffered a series of major DDoS attacks that forced it to go offline several times since November.
A week prior to the incident, cryptocurrency marketplace NiceHash's payment servers were compromised, resulting in the loss of Bitcoin wallet value worth millions of dollars. According to CoinDesk, hackers stole as many as 4,736.42 Bitcoin from NiceHash customer wallets which was equivalent to more than $62 million at existing rates.
A cyber-attack on Bithumb, South Korea's largest etherium cryptocurrency exchange, in July also resulted in a loss of over $1 million in digital coins. The hackers also compromised details of 30,000 customers and proceeded to dry up customers' Bithumb accounts using stolen passwords.
According to independent cyber security researcher Ashley Shen who spoke to Sky News, the recent surge in the value of Bitcoin had started working as an incentive for North Korean hackers for whom stealing digital currency was easier than stealing physical currency.
'We assume one of the reasons why Bitcoin is being attacked is because the price keeps increasing and we think it's reasonable for hackers. Digital currency might be easier to gain than physical currency. So I think it's reasonable,' she said.
She added that hacker groups also shifted their attention from mining sensitive data to stealing digital currency. Groups backed by North Korea like Lazarus and Bluenoroff were also found targeting banks located in Europe and South Korea frequently.