Mt. Gox shut its operations and a lot of consumers are unable to process Bitcoin; this has generated a huge crisis. However, Mt. Gox is not the only Bitcoin exchange that faced trouble recently. Even Bitstamp was facing trouble processing Bitcoin for a couple of days recently; however, it restored its operations lately.
On the other hand, Mt. Gox has yet not opened its services and in such a situation it was expected that the government will take cognizance and in that pursuit Manhattan Attorney Preet Bharara sent subpoenas to Mt. Gox, other Bitcoin exchanges, and businesses that deal in Bitcoin. He has sought information on how they handled recent cyber attacks.
Also, various sources in Washington say that US federal law enforcement is investigating Mt. Gox and may come with report soon. The sources also say that the US Federal Bureau of Investigation was monitoring the situation closely. Last year, the US authorities had subpoenaed Bitcoin agencies but they had not expected such a massive failure.
Nonetheless, it is not just that the US authorities are taking cognizance to the massive failure that Bitcoin exchange Mt. Gox has gone through but even the Japanese government is reportedly taking notice of it. Japan’s Finance Ministry and police are also looking into the abrupt closure of Mt. Gox and this does not auger well.
Incidences of Bitcoin Exchange Hacking Increased Recently
Bitcoin exchanges which have been facing the problem of illegal hacking recently according to Bitcoin customers need to develop a solution that can protect them and their customers from any onslaught. Nonetheless, the recent cyber attacks exploited a process used by some Bitcoin exchanges that introduced “malleability” into the code governing transactions.
Malleability allows hackers to slightly alter the details of codes to create thousands of copies of transactions and then the same copies slow the exchanges to a crawl, forcing them to independently verify each transaction to determine what was real and what was fake. Some experts however believe that if Bitcoin is upgraded, this problem can be solved.
Though Bitstamp faced similar problem, it restored its services, Mt. Gox never resumed service before going dormant on Tuesday. This has led to disappointment among thousands of customers who are unable to recover their funds. Though the Bitcoin exchange promises to work on the problem and come up with a solution, the government taking cognizance might console aggrieved customers.
To contact the reporter of this story: Deepak Tiwari at firstname.lastname@example.org