World's Biggest Bitcoin Exchange Bitfinex Hit by Cyberattack

Hong Kong-based Bitfinex says its facing a 'denial of service' attack  after the SEC urges investors to ask exchange providers about  'substantial risks of theft or loss, including from hacking' in a  warning on cryptocurrencies.

Bitfinex, the world's largest digital currency exchange, shut down  services Tuesday. Dec. 12, amid a so-called denial of service attack  that is increasing concerns over the safety and security of bitcoin  trading. 

Hong  Kong-based Bitfinex said the attempted attack, the second in as many  weeks, was ongoing and that it was working on solutions to migrate  trading traffic in order to protect client orders. Distributed Denial of  Service, or DDOS attacks, occur when hackers attempt to overwhelm  systems with surges of activity from other systems, often via bots, with  the aim of controlling them from within or extracting a ransom payment  to cease the disruption. 

The attack followed a warning  late Monday, Dec. 11, from the U.S. Securities and Exchange Commission  over the safety of online digital currency trading and the lack of  protection for investors in the as-yet unregulated market. 

"These  markets span national borders and that significant trading may occur on  systems and platforms outside the United States," SEC Chairman Jay  Clayton said. "Your invested funds may quickly travel overseas without  your knowledge. As a result, risks can be amplified, including the risk  that market regulators, such as the SEC, may not be able to effectively  pursue bad actors or recover funds." 

The  warning was, at least in part, reflected in a plunge in volume of  trading in the maiden bitcoin futures contract on the Cboe after its  launch on Monday. 

Around 615 contracts changed hands in the second session of trading  for the January settlement by 10 a.m. ET, suggesting a value of around  $11 million was traded over the exchange based on the current "front  month" price of $18,000 each. That's down from around 4,100 contracts  over the same period Monday and a trading value of around $73.8 million.  Spot bitcoin prices were trading at $16,975, according to CoinDesk.

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