WORST WEEK EVER: $2.7 Million In Bitcoin Stolen From Silk Road 2.0, And Three Top Exchanges Have Banned Withdrawals

 
 
 

Some unfortunate news for bullish Bitcoin investors this week (I’m lookin’ at you, Tyler and Cameron!):

  • VentureBeat reports that 4,474 Bitcoin — about $2.7 million — were stolen from black-market e-commerce site Silk Road 2.0, where transactions are completed entirely through Bitcoin. Site administrator ‘Defcon’ wrote that “a vendor exploited a recently discovered vulnerability in the Bitcoin protocol known as ‘transaction malleability’ to repeatedly withdraw coins from our system until it was completely empty.” 
  • BitStamp, currently the world’s largest Bitcoin exchange, halted customer withdrawals and claimed a denial-of-service attack was causing “inconsistent results” of their total Bitcoin. The denial of service attack is apparently based on the same vulnerability which facilitated the Silk Road 2.0 robbery.
  • Mt. Gox, which the Dept. of Homeland Security accused last year of running an “unlicensed money transmitting business,” also temporarily banned withdrawals because of inconsistent transaction calculations.

The cluster of problems implies a single hacker attack, but Bitcoin’s very nature as an anarchic currency — and the illicit purchases involving Bitcoin — will not likely incur the Department of Justice to jump to the rescue.

Bitcoin’s price currently hovers around $650, although given the currency’s wild spikes in price, there’s a good chance it’ll be above $1000 by the time I hit ‘Publish.’ And don’t expect me