The UK-based crypto exchange EXMO has seen disruptions in its services as it is the victim of a distributed denial-of-service (DDoS) attack that took down its platform for about 3 hours, the second attack in the last 2 months.
The news was reported by the Exchange in a Tweet on Monday 15th, in which the company informed the reason behind the website’s disruption and informed its users it was working on solving the issue.
A DDoS attack makes use of multiple systems to overload a server with invalid requests, preventing it from establishing legitimate connections and causing crashes in some instances.
While these attacks can be mitigated in centralized platforms, it is hard to completely prevent them due to the level of sophistication achieved by bad actors.
EXMO Has Been Hit More than Once
EXMO had already been a target for hackers back in December of 2020 when the exchange lost about 5% of its total assets according to Maria Stankevich, head of business development for the exchange.
Back then, that 5% represented about $10.5 million in BTC; ETH, XRP, and other cryptocurrencies, with some of the funds being recovered in collaboration with other exchanges.
While no assets were stolen in this instance, the attack prevented the platform from being used by legitimate users, which resulted in a drop in trading volume of about 20% according to coingecko data.
Attacks on Centralized Exchanges are not New
While in most cases these attacks are only intended to disrupt the exchanges capabilities to offer its services, attacks like the one suffered by EXMO and KuCoin back in December and September of 2020 respectively, resulted in millions of dollars in losses.
The centralization and custodial nature of these exchanges make them a lucrative target for bad actors looking to steal crypto assets, as well as easier targets for DDoS than decentralized services.
While Decentralized Exchanges are susceptible to attacks, as evidenced by the attack suffered by yearn.finance in recent weeks, their security is also dependant on the settings of the contract per se and not its infrastructure.
In the case of past attacks on other exchanges, OKEx CEO Jay Hao and Binance CEO Changpeng Zhao stated they believed competitors to be behind the attacks. However, EXMO has yet to publish more details on how the attack took place and who might have been behind it.
Decentralized Exchanges Continue to Gain Popularity
Often seen as a more secure and efficient alternative, Decentralized Exchanges (DEXs) continue to gain popularity in the crypto community by providing non-custodial services, lower fees, and a larger listing of cryptocurrencies.
Back on January 15th, Uniswap reached $100 billion in trading volume only 9 months after its launch in May of 2020, becoming the first DEX to reach the milestone.
January saw the exchange hit $20 million in monthly trading volume, becoming one of the major players in the cryptocurrency ecosystems as major centralized exchanges look to keep their advantage in the sector.
Popular DEXs like 1inch and Sushiswap have also continued to grow in popularity, with the entirety of the niche surpassing $63 billion in January of 2021. With this amount of interest, it is fair to speculate that DEXs will continue to expand into the marketplace this year.
While centralized exchanges continue to lead the crypto market, the increasing interest in cryptocurrency, increasing regulation, and the inception of new cryptocurrencies every day will play an important role in how the competition between Centralized and decentralized exchanges continues to play.