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February 19, 2014updated 04 Apr 2017 4:08pm

MTGox to resume bitcoin trading after closing loophole

Tokyo-based bitcoin exchange platform MTGox will resume bitcoin trading after it identified a technical problem that left it vulnerable to disruption.

By Angelo Boccato

Tokyo-based bitcoin exchange platform MTGox will resume bitcoin trading after it identified a technical problem that left it vulnerable to disruption.

MTGox halted transfers of the digital currency to external addresses on 7 February after it spotted what it called "unusual activity".

The investigation into the unusual activity revealed a loophole that thieves could use to fool the transaction process into sending double the correct number of bitcoins.

A statement released by the company on reported that the company has found a solution to the loophole by issuing a unique identifier with each transaction.

In the statement the company adds: "This will prevent any fraudulent use of the malleability issue and protect the assets of our customers".

The loophole left the platform vulnerable to attacks, which slowed down the rate at which coins could be bought and sold.

Bitcoin wallets were particularly affected by these vulnerabilities, while cash withdrawals and transfer of bitcoins to – rather than from – bitcoin wallets were not.

The loophole was also thought to have been exploited by thieves, who stole about $2.7m in bitcoins from the Silk Road 2 on 13 February.

The effect of the company’s choice to suspend bitcoin trading caused bitcoin values to slump from their mid-January high of $1,000 (£600) to about $540.

The suspension of withdrawals also led some bitcoin traders to travel to Japan to confront MTGox’s staff and demand the return of their currency.

MTGox has not specified when withdrawals might start again but it would issue another update on the matter by 20 February at the latest.

 

Related articles:

Bitcoin value falls after Silk Road 2 hacked to the tune of $2.7m

HotwirePE introduces first Bitcoin bank in Australia

New York to adapt state legislation for Bitcoin, says head of financial services department

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