Bitcoins Worth $300 Million Reportedly Stolen from Mt. Gox

The news from the bitcoin world are not very good. Once popular and leading bitcoin exchange mt. Gox has gone offline. The Mt. Gox exchange had stopped withdrawals for customers a few weeks ago. Later Mt. Gox had withdrew itself from the Bitcoin Foundation.

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Bitcoin community is abuzz with a document available on Scribd where it has been claimed that over a period of many years, millions of dollars worth of bitcoins were stolen from Mt. Gox and this went unnoticed for a long time. The theft was due to a known “transaction malleability” bug which Mt. Gox also said had hit its system.

Here is the relevant part from the document doing rounds among bitcoin community:

For several weeks MtGox customers have been affected by bitcoin withdrawal issues that compounded on themselves. Publicly, MtGox declared that “transaction malleability” caused the system to be subject to theft, and that something needed to be done by the core devs to fix it. Gox’s own workaround solution was criticized, and eventually a fix was provided by Blockchain.info. The truth, it turns out, is that the damage had already been done. At this point 744,408 BTC are missing due to malleability-related theft which went unnoticed for several years. The cold storage has been wiped out due to a leak in the hot wallet.

At the current market prices, these bitcoins are worth $300 million.

The full document can be read here on Scribd.

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