How Belarusian crypto exchanges weathered the internet shutdown

Against the backdrop of protests tied to the Belarusian presidential election, residents were cut off from the internet for several days from August 9 to 11. The authorities attributed the disruption to DDoS attacks by external actors, but experts disagreed. Belarusians, meanwhile, were forced to employ various workarounds to bypass blocks and exercise the suddenly curtailed right to access the internet.

Alexey Korolenko, the chief marketing officer of the cryptocurrency exchange FREE2EX, told ForkLog how local trading platforms coped with the shutdown through decentralisation.

Problems with internet access in Belarus began on the eve of the presidential election on August 9. According to analysts, traffic from Belarus fell tenfold: from 200 GB per second to 20 GB. Western and Russian sites stopped loading, as did resources of independent Belarusian media. Messenger apps, social networks and many VPN services did not work. Even Telegram was accessible only via special proxies and circumvention mechanisms—and even then not to everyone.

Update: Multiple internet providers in #Belarus have lost routing as polling stations start to close from 8:00 p.m; geolocated network data confirm the new disruption has nation-scale impact further limiting visibility of events 📵 #Belarus2020

📰 https://t.co/JcBhvhgVcR pic.twitter.com/EANVovMoWH

— NetBlocks.org (@netblocks) August 9, 2020

By the evening of August 9, the internet stopped working entirely. Officially, the reason was DDoS attacks on Beltelecom from abroad, although many experts doubted this. Full connectivity was restored only on August 12.

DDoS attacks or isolation of the national segment: what is happening with the internet in Belarus

As is well known, Belarus is one of the main blockchain hubs in Eastern Europe. Thanks to advanced regulation in the cryptocurrency space, there are many fintech startups operating here, as well as a number of regulated crypto exchanges, such as FREE2EX.

Spoiler: the internet shutdown was carried out quite calmly. And there are several reasons for that.

Distributed and redundant infrastructure

Rumours of a possible internet outage circulated even before the elections. Every exchange has a contingency plan for outages that may be triggered by equipment failure, natural disasters and other unforeseen events.

Such a plan entails distributing system components and backup trading platform instances across different facilities on independent data-centres. The data-centres of the exchange do not necessarily have to be located where the company is registered.

The ideal option – so-called geographic redundancy, that is, placing backup copies in different cities and countries. This is relevant in the post-Soviet space, in Latin America, China and other regions where actions of authorities and regulators can be unpredictable.

Thanks to distributed and redundant infrastructure, the trading interfaces of exchanges during the shutdown continued to operate normally. All traders outside Belarus traded calmly, unaware of the Minsk crisis.

Ensuring withdrawals

If trades aren’t working, that’s only half the problem. Clients begin to panic when they cannot withdraw funds. We pre-fund the exchange wallets to the maximum so that, if necessary, we can process all withdrawal requests.

As a result, there was no panic wave of withdrawals. Regarding acquiring, our Belarusian partners had problems, but they resolved them the same day. Belarusian clients who placed orders to buy cryptocurrencies via bank cards received their assets the same day. International acquiring worked without any glitches.

Distributed support

The exchanges’ support staff are always based outside the country. When connectivity is lost, client queries are switched to them.

That is what happened during the shutdown. Although traders on Belarusian territory faced difficulties contacting support without a VPN, help was provided to all other clients as usual.

Additionally, support staff, where possible, personally contacted major Belarusian clients to explain the situation and reassure them that their funds were not at risk.

Phishing risk

Initially, Belarusian clients could not tell whether the problem was on their side or whether the exchange had been hacked.

Indeed, a country-wide internet shutdown may seem like an excellent opportunity for hackers capable of finding a backdoor and penetrating the system while everyone else is distracted. But in practice, the risk of a DDoS attack or other forms of intrusion on such a day is no higher than on any other day, since security systems operate as normal.

However, users themselves must be vigilant in such moments: attackers may exploit the outage to solicit data via email phishing.

Conclusion

The Belarusian economy weathered the internet shutdown fairly heavily. Aggregate daily losses estimated at $56 million. For a small country this is a substantial sum.

There is every reason to believe that many Belarusians have discovered what a VPN is and are now prepared for a repeat of such a scenario. There is every reason to believe that many businesses have drawn the right conclusions and have already begun building reserve infrastructure.

Following the internet shutdown in Belarus: how to bypass the blocks and when it is impossible to do so

Following these rules, Belarusian crypto exchanges weathered the internet shutdown with minimal losses. Trading outside the country continued without problems. In Belarus, our clients switched to VPN, and after a couple of days connectivity was restored. There were neither serious attacks on exchanges nor noticeable declines in revenue.

Today, a simple internet outage cannot harm an exchange, but users in conditions of uncertainty may fall for phishing and other scammers.

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