DDoS cripples Bitcoin exchange Mt. Gox after trading resumes

Update at 6:15 a.m. PT Friday: Bitcoin's tumble continued after trading resumed. As of now, the digital currency is trading at $69.

Less than two hours after the resumption of Bitcoin trades following a lengthy suspension, currency exchange Mt. Gox is offline, the apparent victim of a distributed-denial-of-service attack.

"We are experiencing a stronger than usual DDoS," the Tokyo-based exchange said tonight in a Google+ post. "We are working in it."

Mt. Gox, which handles three-quarters of the trades in the digital currency, announced a suspension of trading this morning after a rollercoaster trading day yesterday that saw Bitcoin's valuation drop 61 percent before recovering a bit with a 37 percent loss. The decentralized digital currency, which had quadrupled in value in the past four weeks, traded as high as $266 per Bitcoin yesterday before a dramatic correction trimmed its value to $105. It eventually recovered to trade as high as $145 a Bitcoin.

Mt. Gox denied that yesterday's price plunge was the result of a DDoS, saying that the price drop was due to an unexpected influx of new trades. After allowing the market to "cool down," Mt. Gox resumed trading this evening and Bitcoin immediately lost 35 percent of its value before rebounding to near its previous levels.

The decentralized currency, which was established in 2009 to avoid the prying eyes of law enforcement officials, has grown in popularity in recent months thanks largely to financial uncertainty in Europe and nascent investor curiosity. But the platform also has been the frequent target of hackers who are allegedly trying to disrupt trade execution to manipulate the currency's value.

Bitcoin's value dropped $30 in one day last week after Mt. Gox was the target of a "major" DDoS attack that it said created "its worst trading lag ever."

"Attackers wait until the price of Bitcoins reaches a certain value, sell, destabilize the exchange, wait for everybody to panic-sell their Bitcoins, wait for the price to drop to a certain amount, then stop the attack and start buying as much as they can," the Japan-based exchange said in a statement at the time. "Repeat this two or three times like we saw over the past few days and they profit."

While Bitcoin has been popular lately with investors, it also has been a frequent target for other criminal activity, including thefts, hacks, and scams. Nearly a quarter of a million dollars was stolen in one such virtual heist last year.

(Via The Next Web)