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Mt gox

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Original author: 
Cyrus Farivar

On Thursday, the world’s largest Bitcoin exchange, Mt. Gox, announced that it would require all users to “be verified in order to perform any currency deposits and withdrawals. Bitcoin deposits do not need verification, and at this time we are not requiring verification for Bitcoin withdrawals.”

The company did not provide any explanation about why it was imposing this new requirement, but it did say that it would be able to process most verifications within 48 hours.

The move comes two days after federal prosecutors went after Liberty Reserve, another online currency that had notoriously poor verification. (In court documents, a federal investigator in that case included an address of “123 Fake Main Street, Completely Made Up City, New York” to create an account that was accepted.) It also comes two weeks after the Department of Homeland Security started investigating Mt. Gox over the possible crime of money transmitting without a license.

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Original author: 

Bryan Mills

A study of the Bitcoin exchange industry has found that 45 percent of exchanges fail, taking their users' money with them. Those that survive are the ones that handle the most traffic—but they are also the exchanges that suffer the greatest number of cyber attacks.

Computer scientists Tyler Moore (from the Southern Methodist University, Dallas) and Nicolas Christin (of Carnegie Mellon University) found 40 exchanges on the Web that offered a service changing bitcoins into other fiat currencies or back again. Of those 40, 18 have gone out of business—13 closing without warning, and five closing after suffering security breaches that forced them to close. Four other exchanges have suffered serious attacks but remain open.

One of those is Mt Gox, the largest Bitcoin exchange, with Moore and Christin stating that at its peak it handles more than 40,000 Bitcoin transactions a day, compared to a mean average of 1,716. It has been the victim of a huge number of distributed denial-of-service (DDoS) attacks over the past month during the peak of the Bitcoin bubble (and its subsequent bursting—though the price now appears to be rising again). Its latest statement, dealing with the attack it suffered on April 21, is long and comprehensive, seeking to assuage the fears of Bitcoin users who feel that Mt. Gox is becoming a weak chain in Bitcoin's infrastructure.

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