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Bitcoin exchanges reportedly served with subpoenas

Manhattan US Attorney's office wants information from different Bitcoin exchanges concerning recent round of cyberattacks, says Reuters.

Lance Whitney Contributing Writer
Lance Whitney is a freelance technology writer and trainer and a former IT professional. He's written for Time, CNET, PCMag, and several other publications. He's the author of two tech books--one on Windows and another on LinkedIn.
Lance Whitney
2 min read

Mt. Gox and other Bitcoin exchanges have reportedly received subpoenas from a US Attorney investigating their handling of the recent cyberattacks launched against them.

Citing "a source familiar with the probe," Reuters said on Thursday that the subpoenas from Manhattan U.S. Attorney Preet Bharara were sent to Mt. Gox, other Bitcoin exchanges, and businesses that deal in the virtual currency. The investigation is focused on the recent distributed denial of service attacks that forced Mt. Gox and other exchanges to suspend withdrawals.

A spokesman for Bharara declined to comment to Reuters. A spokeswoman for the attorney's office told CNET that it's common practice to neither confirm nor deny investigations.

On February 11, the Bitcoin Foundation revealed that some exchanges had halted withdrawals after being hit by DDoS attacks.

"Somebody (or several somebodies) is taking advantage of the transaction malleability issue and relaying mutated versions of transactions," the foundation said at the time. "This is exposing bugs in both the reference implementation and some exchange's software."

The entire Bitcoin industry is going through a rough patch, not just because of the recent cyberattacks but also because of Mt. Gox's current financial crisis.

A second source told Reuters that US federal law enforcement is investigating Mt. Gox, while a third source said the Federal Bureau of Investigation is monitoring the situation. Further, Japanese officials are looking into the shutdown of Japan-based Mt. Gox.

Earlier this month, Mt. Gox said that it was temporarily halting all withdrawal requests due to a technical problem in its withdrawal process. The company claimed that the problem affects all Bitcoin transactions. But that claim was disputed by the Bitcoin Foundation, which instead blamed Mt. Gox's own transaction process.

Since then, Mt. Gox has been in a precarious position. On Monday, the exchange's Web site went down admid reports that it was insolvent after losing hundreds of millions of dollars. On Tuesday, the site came back online only to tell customers that it was halting all transactions for the time being. On Wednesday, Mt. Gox CEO tried to reassure concerned customers that he was working with different parties to resolve the exchange's current issues.

A spokesman for a group of Bitcoin exchanges told Recode earlier this week that "Mt Gox has confirmed it will file bankruptcy in private discussions with other members of the Bitcoin community."