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Mt. Gox will restore Bitcoin value following hack
BITCOIN EXCHANGE FIRM Mt. Gox has promised to restore the value of customer accounts to pre-hack levels.
The theft of thousands of dollars in Bitcoins last week led to two things, the company shutting down its services last week and a massive crash in the quoted value of the digital currency, but this week the Bitcoin currency exchange Mt. Gox hopes to cure both of these problems.
The firm has promised that as it restores its services and rolls back any unauthorised trading, so too will it restore the value of its currency.
"The bitcoin will be back to around 17.5$/BTC after we rollback all trades that have happened after the huge Bitcoin sale that happened on June 20th near 3:00am (JST)," it said in a statement.
According to the firm the hack was not as bad as was previously reported, and rather than taking thousands away from one user it actually took only about one thousand dollars.
"One account with a lot of coins was compromised and whoever stole it (using a HK based IP to login) first sold all the coins in there, to buy those again just after, and then tried to withdraw the coins," said the statement. "The $1000/day withdraw limit was active for this account and the hacker could only get out with $1000 worth of coins."
However, this was enough to crash the value of the currency down well into the doldrums and the firm is equally as keen to fix this as its security systems.
"Apart from this no account was compromised, and nothing was lost," it explained. "Due to the large impact this had on the Bitcoin market, we will rollback every trade which happened since the big sale, and ensure this account is secure before opening access again."
The Bitcoin service is expected to go live again at 2am this morning, UK time, and any users with insecure passwords will be asked to choose a more sophisticated alternative before being allowed back in. µ
Tags: Security
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Mt. Gox seems to be trying to manipulate the market with their statement "The bitcoin will be back to around 17.5$/BTC". Their site is also publishing that phony $17.50 price to "bitcoin.org", They don't determine the price. Buyers and sellers do. The current price on other exchanges is around $13.
As an exchange, the price shouldn't matter to Mt. Gox. They make their money from transaction fees. But if they're also speculating in Bitcoins themselves, they may have an exposure if the price drops.
The whole Bitcoin ecosystem is flaky. None of the "exchanges" or "exchangers" have the organization or assets of a small-town bank, yet some of them are dealing in millions of dollars a day. As we wrote on Downside back on June 11th, "Due diligence on the "Bitcoin exchanges" and their payment intermediaries is suggested. Converting Bitcoins into another currency involves a chain of several entities of questionable legtitimacy, dubious reliablity, or very limited financial strength. Failure under stress is likely."
MtGox.com is just one exchange. I use http://www.TradeHill.com,
which has lower fees and seems more professional to me. I have a code
that will get you 10% off your fees there if anybody wants to buy or
sell bitcoins on TradeHill.com: TH-R1168
In an interview I found out 2 things
1 There are really only 2 people working at the mtgox exchange
2 One of them refused to deny it was his account that was used to dump on the exchange
I then found out that
The person who bought all the coins back for pennies was NOT the same person - he was interviewed and on the forums there are correpsonfance between the two.
What really happened here? It was not what you reported, you should read the forums and see the bitcoin interview series on youtube and bring real news not PR pre-prints with your name on the top and a comment on the bottom.