Bitcoin World Rattled by Exchange Glitch

Mt. Gox has suspended withdrawals since Friday
By Matt Cantor,  Newser User
Posted Feb 11, 2014 9:49 AM CST
This April 3, 2013 file photo shows bitcoin tokens in Sandy, Utah.   (AP Photo/Rick Bowmer, File)

(Newser) – Bitcoin's value was reeling yesterday amid suspension of withdrawals at a key exchange called Mt. Gox. That marketplace reported "unusual activity," suggesting the problem could be due to "a bug in the Bitcoin software." Mt. Gox said yesterday it would continue to prevent withdrawals, a move instituted Friday, indefinitely; it saw Bitcoin value drop 27% from its closing price on Friday, hitting a low of $500 before climbing back to $595.74 yesterday—still down some 14% from Friday, Reuters reports. Forbes explains that the glitch can enable "someone to use the Bitcoin network to alter transaction details, making it appear that withdrawals to Bitcoin wallets have not occurred and enabling the currency to be resent—potentially allowing someone to make a withdrawal twice for only one charge."

The CoinDesk Bitcoin price index yesterday removed Mt. Gox over a "persistent failure to meet the index's standards." According to that index, the currency's value dropped to a low of $540 yesterday. A grad student in virtual currency tells the New York Times that yesterday "just confirms what everyone in the Bitcoin community has known for a while: Don't use Mt. Gox." For its part, Mt. Gox said it wasn't the only exchange affected by the bug, the Wall Street Journal notes. But the Bitcoin Foundation says the issue is on Mt. Gox's end: "It's really an unfortunate interaction between what is arguably a flaw in the protocol—I would call it a quirk, not a flaw—and Mt. Gox's (digital) wallet and their customer-support procedures."

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