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Two more Bitcoin exchanges hit by DDoS attacks

Both exchanges suspend processing but say no funds have been lost or are at risk
Wed Feb 12 2014, 12:37

TWO MORE BITCOIN EXCHANGES were hit by distributed denial of service (DDoS) attacks on Tuesday as the digital currency's problems took a turn for the worse.

The Bitstamp Bitcoin exchange temporarily suspended Bitcoin withdrawals on Tuesday amid DDoS attacks, while Bulgarian Bitcoin exchange BTC-e announced that the attacks could cause delays in crediting transactions.

"Currently [we have] suspended processing Bitcoin withdrawals due to inconsistent results reported by our bitcoind wallet, caused by a denial-of-service attack using transaction malleability to temporarily disrupt balance checking," Bitstamp said in a blog post, adding that Bitcoin withdrawal and deposit processing will be suspended temporarily until it releases a software fix.

Bitstamp said that so far no funds have been lost and no funds are at risk, while BTC-e asked its users to "please be patient" on Twitter.

Bitcoin Foundation chief scientist Gavin Andresen said that users can be assured that it has identified the issue and is "collectively and collaboratively working on a solution", with is development teams creating workarounds and fixes.

"Somebody (or several somebodies) is taking advantage of the transaction malleability issue and relaying mutated versions of transactions," explained Andersen. "This is exposing bugs in both the reference implementation and some exchanges' software."

The foundation stressed that DoS attacks do not affect people's Bitcoin wallets or funds, but said users of the reference implementation who are bitten by the bug might see their Bitcoins "tied up" in unconfirmed transactions.

"We need to update the software to fix that bug, so when they upgrade those coins are returned to the wallet and are available to spend again," Andersen added. "Only users who make multiple transactions in a short period of time will be affected."

As a result, Andersen said that exchanges are temporarily suspending withdrawals to protect customer funds and prevent funds from being misdirected.

On Monday, Bitcoin exchange Mt Gox has halted withdrawals of the digital currency through its website and cautioned users that other services might also be affected. MT Gox said that "various Bitcoin withdrawals" had raised some issues and that in order to get a proper understanding of the situation it would have to suspend withdrawal processing. µ


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