BitMex accused of incompetence and manipulation after recent outage

As the price of BTC and many other digital assets have fallen off a cliff, BitMex has received additional attention for some unintended outages the Hong Kong-based exchange has experienced lately. The company’s CTO recently took to Twitter to describe a botnet attack that took down the exchange.

After CEO Arthur Hayes promised transparency regarding recent events at BitMex, CTO Samuel Reed revealed a botnet has been attempting to take down their services for a month.

During the attack, the price of BTC dropped from $7,900 to $3,600, the worst single-day drop in years.

The general sell off could be in part attributed to an emerging bear market. All digital assets and traditional markets have taken big hits since the scope of the coronavirus has become clear, and an oil war hasn’t helped matters much. But investors still suspected deliberate market manipulation when BitMex was acting funny. Their outage period coincided perfectly with a bounce in BTC’s price.

Reed noted that hackers have been looking for a weak point in their network for weeks, but DDOS strategies had prevented their success until March 13. He added:

“Mar 13 was a change in strategy for them. The botnet found an endpoint that was consistently, reliably slow. The query they hit did a 400ms reverse sequential scan rather than using the index (Parallel Index Scan / Gather Merge for PG fans), because an ANALYZE hadn’t been automatically run for too long by RDS defaults.

 “After the second attack, we. We’re making systemic changes on our backend to ensure this can’t happen again, and re-reviewing older systems to simplify, de-couple, isolate, and improve perf.”

Some users weren’t happy with the explanation, blaming the fiasco on an over reliance on Virtual Machines (VM) and Amazon Web Services (AWS)

Others weren’t happy to accept mere incompetence as an excuse. Several users feel there might be more sinister motives behind the outage.

With so much money leaving the market as large investors pull out, this is not the situation BitMex needs at the moment. After recently receiving warnings for marketing to customers in the U.K., where they have no license, BitMex now not only runs the risk of alienating regulators and governments, but the average investor as well.

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