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MtGox.com bitcoin exchange shutdown amid rumors of 744,408 bitcoins being stolen


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#1 Grinler

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Posted 25 February 2014 - 10:53 AM

Mt. Gox, one the leading Bitcoin exchanges, has suddenly shut down their site. When you visit MtGox.com you are greeted with a message stating that the site has been turned off to protect their organization, all of the @MtGox twitter statuses have been deleted, and Mark Karpeles, CEO of Mt. Gox, has resigned from the Bitcoin Foundation. For those who had their bitcoins stored at Mt. Gox it does not look promising for you as rumors of 744,408 bitcoins being stolen from the organization have started circulating.

When you visit MtGox.com you will be greeted with the following message:

mtgox.jpg


The text of this message is:
 

Dear MtGox Customers,

In the event of recent news reports and the potential repercussions on MtGoc's operations and the market, a decision was taken to close all transactions for the time being in order to protect the site and our users. We will be closely monitoring the situation and will react accordingly.

Best regards,
MtGox Team


Prior to this message being shown, visitors who went to Mt.Gox were greeted with a blank page. If you looked at the source of the page's html, you would have seen a placehold that appears to be for an new release on Mt. Gox being acquired.
 

<!-- put announce for mtgox acq here -->


The above place holder further corroborates a supposedly leaked crisis strategy document from Mt. Gox, which can be found here. This document states that 744,408 bitcoins have been stolen due to transaction malleability. Whether or not this document is actually leaked from Mt. Gox has not been verified.

This month Mt. Gox suspended the ability for users to withdraw Bitcoins from their Mt. Gox wallets due to a technical issue in bitcoin called transaction malleability. Transaction malleability is the ability for scammers to change the transaction ID for a bitcoin transaction. These transaction IDs were meant to be a simply way for a support person to look up a transaction, but were not meant to be the sole method of identifying a transaction. Thieves were using transaction malleability to make it appear that they never received withdrawals from Mt. Gox. They would then contact Mt. Gox support and state that the withdrawal was never received and Mt. Gox would resend the transaction. This allowed the scammers to receive double the amount of bitcoins then they were supposed to. As you can imagine, if this went on for long enough, the ledgers at Mt. Gox would be severely out of synch with the bitcoin blockchain that the rest of the world used. As Mt.Gox continued to send more bitcoins than their deposits, they were left with a huge deficit of bitcoins.

Though this problem has existed for quite some time, only Mt. Gox has been affected by it due to their custom wallet software. Other Bitcoin exchanges such as BitStamp and Coinbase have reported that they have not been affected by this situation and their operations are running as normal.


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#2 HashX

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Posted 25 February 2014 - 11:29 AM

Bitcoin is losing value according to this.

 

Oh well, I knew this would happen. I think a virtual currency is a bad idea anyways..


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#3 boopme

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Posted 25 February 2014 - 12:05 PM

I'm of the opinion Corruption and no regulation in a fantasy currency - collapse.
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The technology may survive for peer to peer transactions,but where you try to put in real money it looks like a Ponzi to me
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#4 Netghost56

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Posted 25 February 2014 - 01:38 PM

Just today I cleaned a laptop that had 6600+ trojans discovered with MBAM...among those were several trojans listed as "Bitcoin.Miner". There were dozens of active running processes with randomized file names, making me think the system had been 'zombified' into a bitcoin miner by a hacker.

 

I don't think this will stop BitCoin. There will probably be many imitators, such as Lite Coin, but I don't think it will ever go away.



#5 Ted Striker

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Posted 25 February 2014 - 06:22 PM


Though this problem has existed for quite some time, only Mt. Gox has been affected by it due to their custom wallet software. Other Bitcoin exchanges such as BitStamp and Coinbase have reported that they have not been affected by this situation and their operations are running as normal.

 

This is the part that doesn't add up.  There are exchanges that are about the same size of Mt. Gox yet they aren't experiencing any problems as a result of this vulnerability, or flaw, in BitCoin.  Is this because they run their exchange differently or did Mt. Gox use this flaw as an excuse to rip people off.  As far as I know, the only 2 groups to report having bitcoins stolen are SilkRoad 2 & Mt. Gox. 

 

I think they can forget about their plan to re-brand and consider the possibility of facing a class action lawsuit.  Those coins are currently worth over $400 Million USD.



#6 AbsolutoCaos

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Posted 27 February 2014 - 07:15 AM

As far as its known, Mt.Gox had been paying to someone(s) in the double without checking if they were already payd. Transaction malleability (the bug) is know for some time.

MtGox had the fame for being very bad at managing the coins/money. Sadly, many people disregarded what as been discussed for more than a year, and kept putting money there.

MtGox is not Bitcoin. MtGox dealt with bitcoin but cannot influence the value of the crypto currencies, despite of its also known fame for keep speculating the value of the BTC, most probably for this "missing 744.000 btc" reason.

 

Governments have coming out to say careful with the crypto currencies, also sadly they (the governments) did not come out to say to ppl, "carefull with the swaps, mortgages, etc" before the 2008 crisis.

 

Crypto currencies are not going to fade away. This will be the future of payments, were you are charged less then 1% for a transfer of dozens/hundreds btc's (milions of dollars). Tell me what bank does that?

 

To the ones who think digital currenties should not exist, mortgages selling should not happen also. Governments should also stop to allow credit companies to lend money to ppl who cannot afford to pay back. 

 

Hackers are also not going to stop with trojans that inject mining code on vulnerable machines. Why should they? Gives them more money than SPAM gave in any given time.

For this, i could blame google to put those darn paid links that directs (mindless) users to very doubtful sites. Blame Adobe for their private flash code, blame Sun/Oracle for their java "blackbook" (a theory of mine) of vulnerabilities. Could blame the world for being the way it is. Could blame myself for being like this!

 

Edit: Then, after reading some more, it appears some new details and, as the leaked script could be rumour, also this info:

http://www.reddit.com/r/Bitcoin/comments/1z37zw/mt_gox_has_at_least_200k_btc/cfq5uzy

this comment says and i quote:

 

 

Well it could be that Gox is under an order to halt any transfer of BTC from those wallets, and if they move any they will be arrested... Without a doubt, Gox has (or will have) the majority of their BTC after things are no longer "temporarily unavailable." They may have lost some small % of coins to the TM issue, but that is probably insignificant. It is obvious that MK is powerless right now and is waiting on SOMETHING to happen before he can have his power back. Whatever that "something" is, I don't know for a fact, but I would guess that it relates to a government.

 

 

 

 

Sorry for the rant.


Edited by AbsolutoCaos, 27 February 2014 - 12:58 PM.


#7 dls62

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Posted 28 February 2014 - 09:06 AM

And now MtGox has filed for bankruptcy protection according to the BBC.


Edited by dls62, 28 February 2014 - 09:07 AM.


#8 Netghost56

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Posted 28 February 2014 - 09:51 AM

And now MtGox has filed for bankruptcy protection according to the BBC.

 

They apparently also lost their personal stake of 100,000 Bitcoin on top of the 750,000 owned by clients. :oopsign:

 

Wonder what the "Wonder Twins" take on this is? I want to hear from them.


Edited by Netghost56, 28 February 2014 - 09:53 AM.


#9 AbsolutoCaos

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Posted 28 February 2014 - 12:06 PM

A total disaster for the ones who have money there.

 

A regular redditr went down to the blockchain, pointed 5 addresses from gox totalling close to 200.000 btc's with no movements since 2011... probably lost privt keys to handle them...

 

It was a hole with no end on sight since the beginning, it seems.

 

Meanwhile bitcoin showing its resilience to the news, keeping the price above 500$. Just show's how this crypto currencies are of value.

 

@Netghost56, there is the Winklevoss bro's statement in their page:

http://www.winklevosscapital.com/posts/78045275170


Edited by AbsolutoCaos, 28 February 2014 - 12:06 PM.


#10 Netghost56

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Posted 28 February 2014 - 01:21 PM

@Netghost56, there is the Winklevoss bro's statement in their page:

http://www.winklevosscapital.com/posts/78045275170

:thumbup2:

 

Though he's a bit evasive in some statements.



#11 AbsolutoCaos

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Posted 28 February 2014 - 01:37 PM

I bet they only come out with what allowed by their lawyers and the Bitcoin foundation members.

Takes no guess that nail biting news are yet to come out...

 

To sum up all this, the problem was in the MtGox management.

Sure Bitcoin, as a programable network language, is subject to problems eventually exploited by whoever.

But in the end, it's bitcoin owners main responsability to take care of their coins. Infinite talking on how to create a paper wallet, cold storage, offline wallets, all with secure passfrases encryption to protect privt keys.

Leaving as many as 500 btc's in other's hands before any legislation or regulation as taken place, is plain wrong.



#12 dfrancis

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Posted 04 March 2014 - 04:30 PM

Seriously, i am still in doubt about the fact of closing down.



#13 computerxpds

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Posted 04 March 2014 - 10:45 PM

Do you mean shutting down permanently? Currently their website is shutdown and their twitter has been cleared of all tweets. It isn't looking good for that company. They are filing for bankruptcy protection to cover their assets and their losses. If anything they will shutdown and head for the hills.

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#14 dfrancis

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Posted 05 March 2014 - 11:54 AM

Things are not going well, :( Any hopeful news?



#15 boopme

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Posted 05 March 2014 - 12:14 PM

Flexcoin, a Canada-based bitcoin bank, said it was closing down after losing bitcoins worth about $600,000 to a hacker attack enabled by flaws in its software code.

Flexcoin said in a message on its website that all 896 bitcoins stored online were stolen on Sunday. Its collapse came after Mt. Gox, once the world's dominant bitcoin exchange, filed for bankruptcy protection in Japan and said it may have lost some 850,000 bitcoins due to hacking.

 
Bitcoin bank Flexcoin shuts after hacking theft
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