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Poloniex Goes Down, Users Lose Big

Over the course of 12 hours on May 9, the Poloniex digital asset exchange was intermittently inaccessible to users, causing quite a stir for traders and the greater community. According to their official Twitter account, the cause was a Distributed Denial of Service (DDoS) attack on the exchange, preventing users from logging on or making any trades. Exacerbating the issue was the fact that as the attacks occurred, a majority of the exchange’s assets fell dramatically, some taking overwhelming losses of up to 45 percent.

 

    polo

Big Losses In Digital Assets on Poloniex March 9th, During One of Several DDOS Attacks

 

While the cause for such losses remains unclear, a sharp rise in the price of bitcoin may take some of the blame, as assets on the exchange trade in an asset:bitcoin ratio. At the time bitcoin rose to a reach a brand new all time high, above $1700, but the reaction in assets seemed extreme against a 9 percent rise in bitcoin.

It should be noted that digital assets have risen steeply in the last 30 days, adding $25 billion in value to the overall booming market. And while a correction may have been necessary, the cause of the broadbased fall led by Poloniex remains unclear.

Poloniex is the among world’s largest digital asset exchanges, with millions of dollars in assets traded on May 9 alone. But the volatility seen on that date is not unique to this popular platform. Values on Poloniex also rise at breakneck speed, often causing traders to invest in overvalued assets. Over the years, this has raised concerns about the exchange and the validity of its trades, so that the questions have to be asked: Do the owners of Poloniex move these markets with intent? And if they have that power, do they move them with the intention of profiting for themselves?

Recently there have been warnings about Poloniex by respected members of the community. Just one day before the May 9th incident, Charlie Shrem, a founding member of the Bitcoin Foundation, spoke to an audience in Toronto, saying, “Poloniex is one of the biggest dangers to our ecosystem today.” And in lieu of the recent activity on the exchange, a California law firm has begun an investigation. In a May 10th press release, Berns Weiss LLP stated:

“Due to users’ inability to access their accounts because of the attacks, both Kraken and Poloniex exercised their discretion to liquidate users’ margin accounts.  This action has led users to assert that they may have been the victims of market manipulation and possible insider trading.  If the exchanges or individuals associated with the exchanges violated the law, then users who suffered losses as a result of those violations may bring a lawsuit to recover money damages.”

This was not the first time that Poloniex has had connectivity issues. In fact, DDoS attacks happen on the exchange regularly. On their official Twitter account, we can see seven tweets apologizing for downtime already this year. 

Most likely, Poloniex will not compensate its users for their losses, as they have not done so in the past. And they are not the only player in these volatile markets. Chinese exchanges have long been accused of manipulating bitcoin, and in the end, China’s government stepped in to prevent malicious tactics. As a community, we have to take a look at this environment and ask: Why are we letting private exchanges dictate the value of assets? In an industry calling for decentralization of governments, media, and banks, why have we yet to see the rise of decentralized exchanges?

COMMENTS(13)

  • hl5460
    1 week ago hl5460

    Over the course of 12 hours on May 9, the Poloniex digital asset exchange was intermittently inaccessible to users, causing quite a stir for traders and the greater community. According to their official Twitter account, the cause was a Distributed Denial of Service (DDoS) attack on the exchange, preventing users from logging on or making any trades. Exacerbating the issue was the fact that as the attacks occurred, a majority of the exchange’s assets fell dramatically, some taking overwhelming losses of up to 45 percent.http://news.8btc.com/poloniex-goes-down-users-lose-big

  • BitcoinAllBot
    1 week ago BitcoinAllBot

    Here is the link to the original comment thread. Or you can comment here to start a discussion. Author: 8btccom

  • eustan
    1 week ago eustan

    Good lesson for speculators! Maybe some will learn to consider “risk of DDoS” in the future.

    I’m a (Polo) user but I didn’t lose anything because don’t day-trade.

  • Kprawn
    1 week ago Kprawn

    You cannot blame Bitcoin for this… right. If you use these centralized services, you are more vulnerable to attacks. We had the same problem with MtGox… People blame Bitcoin for their losses, but they made the decision to use these services. I also use these services.. but I never storelarge amounts of bitcoins on these services. I keep it on a hardware wallet.. and when I see a bubble forming… I quickly transfer some coins to the exchange… wait a few hours and sell for a profit. I then transfer the money or the remaining bitcoins out of those services. 

  • panju1
    1 week ago panju1

    A DDOS service is irritating, but not as devastating as a hacker attack. If Poloniex loses its funds like Mt Gox did, it could take down half of the crypto world with it. It has by far the largest volumes of crypto trades taking place.

  • jaimewarlock
    1 week ago jaimewarlock

    I keep seeing stuff like this but I never have a problem moving coins out of Poloniex. Only problem is logging in occasionally, but that is always temporary.

  • richardsNY
    1 week ago richardsNY

    Quote from: panju1 on May 17, 2017, 03:48:35 PM
    A DDOS service is irritating, but not as devastating as a hacker attack. If Poloniex loses its funds like Mt Gox did, it could take down half of the crypto world with it. It has by far the largest volumes of crypto trades taking place.

    DDoS attacks are mostly fired on an exchange to cause the market(s) to react by panic selling, as not accessible exchanges are a sensitive subject nowadays. Don’t forget that big money is involved in the crypto market. If they rent/buy a DDoS attack for a certain amount of hours, the results for the people behind it may be more than rewarding. It’s definitely worth a shot.

  • BitDane
    1 week ago BitDane

    Quote from: richardsNY on May 17, 2017, 05:10:16 PM

    Quote from: panju1 on May 17, 2017, 03:48:35 PM
    A DDOS service is irritating, but not as devastating as a hacker attack. If Poloniex loses its funds like Mt Gox did, it could take down half of the crypto world with it. It has by far the largest volumes of crypto trades taking place.

    DDoS attacks are mostly fired on an exchange to cause the market(s) to react by panic selling, as not accessible exchanges are a sensitive subject nowadays. Don’t forget that big money is involved in the crypto market. If they rent/buy a DDoS attack for a certain amount of hours, the results for the people behind it may be more than rewarding. It’s definitely worth a shot.

    This is not a news   Poloniex is already known for having this kind of problem whenever trading activities heats up.  Worst it goes up when trading is already over making users lose a huge amount of money.  I wonder if it is really the connection problem or an inside job to reap all the profit once coins are hyped.

  • Nooku
    1 week ago Nooku

    Don’t use titles like that, because they are plain wrong.

  • Kemarit
    1 week ago Kemarit

    Quote from: BitDane on May 17, 2017, 11:15:10 PM

    Quote from: richardsNY on May 17, 2017, 05:10:16 PM

    Quote from: panju1 on May 17, 2017, 03:48:35 PM
    A DDOS service is irritating, but not as devastating as a hacker attack. If Poloniex loses its funds like Mt Gox did, it could take down half of the crypto world with it. It has by far the largest volumes of crypto trades taking place.

    DDoS attacks are mostly fired on an exchange to cause the market(s) to react by panic selling, as not accessible exchanges are a sensitive subject nowadays. Don’t forget that big money is involved in the crypto market. If they rent/buy a DDoS attack for a certain amount of hours, the results for the people behind it may be more than rewarding. It’s definitely worth a shot.

    This is not a news   Poloniex is already known for having this kind of problem whenever trading activities heats up.  Worst it goes up when trading is already over making users lose a huge amount of money.  I wonder if it is really the connection problem or an inside job to reap all the profit once coins are hyped.

    I also noticed that Poloniex has been targeted lately by DDoS attacked. It’s not bitcoin fault, we all know that, but at least Poloniex should have anticipated this kind of attacked since there is money, big amounts of money involved and they need to safeguard peoples asset.Wondering also we is behind this attacked on them lately? Are there groups that want Poloniex to be taken down? Who will benefit such attacked on a trading platform and cause panic to investors or traders?

  • 1Referee
    1 week ago 1Referee

    Quote from: TraderTimm on May 18, 2017, 03:38:34 PM
    It isn’t designed for any kind of volume. It isn’t surprising that it falls over after people hammer the site. What I find funny is that the DDoS they are describing could simply be all their users demanding page refreshes, not some nefarious hacker.

    In most cases that’s indeed the main cause of an exchange with poor capacity to go down temporarily. I have been (still am) experiencing this with BTC-E from the first day of me using that exchange in early 2013. Till this day they haven’t been able (whatever the reason might be) to offer people a properly working platform at peak traffic moments. In case exchanges really suffer from a ddos attack, they mostly throw out a public notification stating exactly that.

  • TraderTimm
    1 week ago TraderTimm

    Poloniex didn’t have a good reputation years ago. Its yet-another-clowncar-exchange that is held together with baling wire and chewing gum. It isn’t designed for any kind of volume. It isn’t surprising that it falls over after people hammer the site. What I find funny is that the DDoS they are describing could simply be all their users demanding page refreshes, not some nefarious hacker.Until they upgrade their infrastructure and potentially rewrite their matching engine, I wouldn’t touch them with a 100 meter pole.

  • Bit_Happy
    1 week ago Bit_Happy

    Quote from: TraderTimm on Today at 03:38:34 PM
    Poloniex didn’t have a good reputation years ago. Its yet-another-clowncar-exchange that is held together with baling wire and chewing gum. It isn’t designed for any kind of volume. It isn’t surprising that it falls over after people hammer the site. What I find funny is that the DDoS they are describing could simply be all their users demanding page refreshes, not some nefarious hacker.Until they upgrade their infrastructure and potentially rewrite their matching engine, I wouldn’t touch them with a 100 meter pole.

    “Its yet-another-clowncar-exchange that is held together with baling wire and chewing gum…” That sounds familiar, will be right back:  “The Internet from every angle has always been a house of cards held together with defective duct tape. It’s a miracle that anything works at all….”The Internet Is Held Together With Bubble Gum And Baling Wirehttps://techcrunch.com/2014/03/29/the-internet-is-held-together-with-bubble-gum-and-baling-wire/

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