Bitcoin Week: MtGox, Transaction Malleability, Silk Road 2 Hacked

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Last week was an exciting week for Bitcoin. Here are the top stories.

Mt.Gox, the Japan-based once-leading exchange, has fallen from grace. After halting Bitcoin withdrawals on February 7, the downward spiral continued when it made an announcement that its freeze was due to a critical bug in Bitcoin called “transaction malleability”. This was quickly refuted by Bitcoin core developers and community members alike as spreading misinformation. However, the announcement did have a negative effect on the global price of Bitcoin and sent the price specifically on MtGox tumbling below Bitstamp for the first time.

Read our full report on the transaction malleability claim and counter-evidence.

MtGox v Bitstamp Bitcoin Price Spread Feb 2014

In more positive news, the Bank of Thailand changed its position on Bitcoin. Back in July, Thailand-based Bitcoin Co. Ltd. issued a release asserting that senior members of the Bank of Thailand advised the company that various Bitcoin trading activities are illegal in Thailand. In a letter (external link) issued by the national bank more recently, it was clarified that exchanges may operate in Thailand as long as they are converting Bitcoin only to and from the baht, the national currency. Exchange of foreign currencies is still prohibited.

Bank of Thailand Bitcoin

Silk Road 2, the rebirth of the infamous anonymous drug marketplace, was hacked this past week with over 4,000 bitcoins stolen. You can read the full text of the announcement by the Silk Road 2 operator reposted on DeepDotWeb (external site). In the announcement, the operator writes:

I am now fully convinced that no hosted escrow service is safe. If I cannot trust myself to keep a hosted escrow solution safe, I cannot trust anyone. Multi-signature transactions are the only way this community will be protected long-term. I am aggressively tasking our devs on building out multi-sig support for commonly-used bitcoin clients. Expect a generous bounty if you have the skill to implement this.

Silk Road 2.0 Homepage

And finally, Italy passed a new decree that banks must withhold 20% on inbound wire transfers as a prevention against money laundering and tax evasion. The taxpayer must take the initiative to prove that the money is not compensation. Read more at Il Sole (external link). Is this an opportunity for Bitcoin?

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