Bitcoin exchange Mt. Gox plans to resume withdrawals soon

Troubled exchange says it has developed a workaround for a glitch in how the crypto-currency handles transactions.

Troubled Bitcoin exchange Mt. Gox apologized Monday for suspending withdrawals and promised to resume withdrawals soon.

The Tokyo-based exchange announced on February 7 that it was suspending all Bitcoin withdrawal requests , citing a glitch in the way the currency handles transactions paid out to digital wallets held by third parties. Working with Bitcoin wallet service Blockchain.info, Mt. Gox said it had developed a workaround for the "transaction malleability" that uses a unique identifier to indicate whether a transaction had been modified.

"With this new system in place, Mt. Gox should be able to resume withdrawals soon," the exchange said in a statement (PDF). "At the beginning we will do so at a moderated pace and with new daily and monthly limits in place to prevent any problems with the new system and to take into account current market conditions."

The exchange said it also has added an additional layer of security in the form of a new login system that sends customers an e-mail alert when their accounts have been successfully accessed.

Since its suspension of withdrawals, Mt. Gox has maintained that a bug existed in Bitcoin that affected all transactions that should be addressed by the Bitcoin Foundation -- the organization that manages the crypto-currency. However, the Bitcoin Foundation countered that the issue originated with the exchange's wallet service, customer support procedures, and an unpreparedness for transaction malleability.

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About the author

Steven Musil is the night news editor at CNET News. Before joining CNET News in 2000, Steven spent 10 years at various Bay Area newspapers.

 

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