Bitcoin‘s value plummeted after a prominent exchange suspended Bitcoin withdrawals indefinitely today, citing a flaw in the cryptocurrency’s code.
Mt. Gox released a statement saying it has identified a flaw that allows transaction details to be tampered with, making it look like bitcoins had not been sent to another person’s electronic wallet when in fact they had.
The digital medium of exchange fell to $650 after the announcement, which follows its temporary suspension of withdrawals on Friday.
The statement read: "The problem we have identified is not limited to MtGox, and affects all transactions where bitcoins are being sent to a third party. We believe that the changes required for addressing this issue will be positive over the long term for the whole community.
"As a result we took the necessary action of suspending bitcoin withdrawals until this technical issue has been resolved."
Mt. Gox claimed the flaw had been known to at least part of the core developer community of Bitcoin, but had been "largely ignored".
Bitcoin transactions are a matter of public record, and a user simply specifies how much he or she wishes to send, then sends that amount to the receiver’s wallet – a string of letters and digits that is effectively a key to their bitcoins.
Reacting to the news, digital currency news site CoinDesk removed Mt. Gox from its Bitcoin Price Index, claiming it was down to the exchange’s "persistent failure" to meet standards for inclusion, citing previous lengthy delays in transferring Bitcoin to other currencies on top of the latest suspension.
However, the exchange confirmed it is working with developers to try and resolve the issue.
