CCN Week in Review: Mt. Gox's Lies, Hacking Bitcurex, Dogecoin Forks, and More

CCN Week in Review: Mt. Gox's Lies, Hacking Bitcurex, Dogecoin Forks, and MoreThis week on CCN, we learned that Mt. Gox kept trading despite its insolvency, Bitcurex successfully thwarted a hacking attempt, Dogecoin forked again, and more. Check out our top stories this week (10 March – 16 March) in video and article form. [youtube https://www.youtube.com/watch?v=X1Bh_po5xYE?rel=0]

Mt. Gox Knew it was Insolvent Yet Kept Trading for Weeks

Mt. Gox CEO Mark Karpeles knew 19 days before shutdown of insolvency issues
Mt. Gox CEO Mark Karpeles knew 19 days before shutdown of the exchange’s insolvency issues.

Mt. Gox recently filed for bankruptcy in the United States, and after taking a closer look at the U.S. filing, it looks like Mt. Gox kept trading despite its insolvency. The exchange’s CEO Mark Karpeles knew that a disaster was imminent, yet Mt. Gox hid this from its customers and racked up a large sum in trading fees. Several class-action lawsuits are underway, and Mt. Gox will have to explain why it kept trading Bitcoins that the exchange didn’t even have. Unfortunately for the exchange’s customers, the Mt. Gox saga is unlikely to have a happy ending.

Bitcoin Exchange Bitcurex Successfully Thwarts a Hacking Attempt

Suspicious buy order on Bitcurex shortly before trading was halted.
Suspicious buy order on Bitcurex shortly before trading was halted.

Unlike Mt. Gox, Bitcurex knows how to secure its customer’s Bitcoins. Just recently, a hacker attempted to obtain 19,000 BTC from the exchange with a fraudulent buy order. However, within 5 minutes of the buy order, the site shut down trading to investigate. Within a few hours, Bitcurex offered the following statement on their Facebook page:

Dear Users,

We successfully blocked a hacking attack on Bitcurex, preventing mass theft of BTC funds of our users. Thanks to automatic safety procedures, hackers managed to defraud only a portion of the funds stored in operational Hot Wallet Bitcurex. The majority of funds from Hot Wallet, as well the entirety of funds from Cold Wallet and FIAT monetary funds remained intact.

Our team located and removed the source of the problem. We are working on resuming normal service, at the same time an external audit is being conducted: we will soon provide the exact date of resuming all Bitcurex functionalities. More information will be provided in further statements.

We are sorry for the inconvenience, and most of all we thank the whole BTC community for the support we received: we were put to a test that will make us stronger.

Best regards,
Bitcurex Team

The site will resume operations this Tuesday, 18 March.

Another Dogecoin Fork

dogecoin has forked
Dogecoin has forked to avoid exploitive mining.

Within a month of the previous fork, Dogecoin has forked again, this time to avoid a multipool exploit. Multipools mine whichever coin is most profitable at any given moment, and then these coins are usually converted to popular cryptocurrencies such as Bitcoin. However, some mining groups were exploiting a weakness in the Dogecoin protocol to game the system. To fix this, the Dogecoin developers issued a mandatory update 4 days ago.

New York Financial Authorities Will Accept Applications for Virtual Currency Exchanges

New York will regulate cryptocurrency exchanges
The city of New York will regulate cryptocurrency exchanges no later than the end of June

New York’s Department of Financial Services recently issued a statement saying that they will soon begin accepting applications for digital currency exchanges. Furthermore, Benjamin Lawsky, the Superintendent of Financial Services, is hoping for stronger oversight and regulation of such exchanges after the collapse of Mt. Gox. Lawsky believes that virtual currency exchanges need “…robust standards for consumer protection, cyber security, and anti-money laundering compliance.” The city plans to enact stronger regulatory framework no later than June 2014.

That’s it for this week. Every Sunday we feature our top stories on CCN Week in Review.