Bitcoin Buzz
PUBLISHED : Friday, 14 February, 2014, 11:21am
UPDATED : Friday, 14 February, 2014, 7:38pm

SCMP's Bitcoin Daily Report – a dark twist for Silk Road 2

4,500 bitcoins stolen: reports

The dark side of the bitcoin world has reared its ugly head once more with news of major bitcoin heist. Silk Road 2, the second incarnation of the online black market, has informed its users that its entire holding of bitcoin has gone. The heist of 4,476 bitcoins is worth US$2.5 million at current market rates. Silk Road 2 is blaming “transaction malleability”.

In a quote obtained and identified by Coindesk:

“Our initial investigations indicate that a vendor exploited a recently discovered vulnerability in the bitcoin protocol known as “transaction malleability” to repeatedly withdraw coins from our system until it was completely empty,” said a post from Defcon, one of the site’s moderators, on a forum accessible via the encrypted Tor network.

Silk Road 2’s predecessor was shut down by US law enforcement and regulators for serving a clientele hungry for guns, drugs and other nefarious material.

It is yet more bad news for the bitcoin fan base, and is contributing to a steep decline in global prices. The Coindesk price index has shed more than US$70 in 24 hours – the benchmark combining prices of Bitstamp and BTC-e. Customers fear the 4,500 stolen bitcoins will flood the market and devalue the digital currency.

Chinese exchange suffers hack attack

Huobi, China’s number one bitcoin exchange, suffered a hacking attack yesterday. On Weibo, it “strongly condemned” the incident. It comes in the wake of similar DDoS attacks which hit a number of high-profile bitcoin companies including Bitstamp, Coinbase and BTC-e.

Zennon Kapron, managing director of mainland-based financial research firm Kapronasia, told Bitcoin Buzz:

“Huobi Exchange Platform announced on its Weibo that early yesterday morning, around 4am, the platform was attacked by hackers. As a result, Huobi platform was sluggish. The value of bitcoin dropped sharply below 3900 yuan. After the famous exchange platform, Mt Gox and Bitstamp, being attacked around the world, Huobi is the first bitcoin exchange platform in China to be hit by hackers. This morning, the value of bitcoin continued dropping substantially to 3,469 yuan.”

Its price is currently trading lower than rival BTC China at 3,501 yuan.

24 hours later: Standard Bank rebuffs bitcoin

More than a day after it emerged Standard Bank was piloting a bitcoin system, a spokesman for Africa’s largest bank has scotched hopes of further development and adoption by a heavyweight company.

A spokesman told My Broadband that the pilot scheme was complete but it had “no plans” to launch.

The Johannesburg-based financial institution revealed it had been testing the digital currency for more than seven months. It had embarked on the project to explore “activities around internet-based financial services and solutions offerings with the objective to assess bitcoin, its systems, offerings, challenges and risks”, the spokesman said.

Only eight members of staff were involved in testing and no customers were used in the pilot.

Behind the system, Singapore-based developers Switchless had created a “fully operational and integrated bitcoin portal system”.

So was the "portal system" hyped for hype sake? Over to Switchless.

Industrial Bank of China (ICBC), the world’s largest bank by total assets and market cap, is Standard Bank’s biggest shareholder with a 20 per cent stake and two boardroom seats.

Banking buff: HK banks accept business – except from bitcoin firms

BTC China’s chief executive emerged in Berlin to talk about the future of bitcoin in China.

Buried in the bottom of the article, he claimed that “a bitcoin exchange in Hong Kong has to lie to open a bank account”.

#BitcoinBuzz will attempt to find out what exactly is going on.

Mt Gox extend losses beyond post-China crash price

Mt Gox, once the darling of bitcoin exchanges – particularly for its weighty valuations which contributed to a record US$1,120 peak – has now sunk to its lowest price levels since December’s crackdown by China’s central bank.

The People’s Bank of China intervened to cool the soaring price of bitcoin, ultimately triggering a collapse in global prices. As the Post reported, buyers could snap up coins for as little as 2,011 yuan (HK$2,572), a collapse of more than 70 per cent from a high of 7,588 yuan (HK$9,707) in November last year.

The Mt Gox December 18 low of US$455 was trumped by the February 14 low of US$419.

An angry Mt Gox customer nabbed a last-minute ticket to fly to Tokyo from London to protest outside the bitcoin trading exchange’s Toyko headquarters. Kolin Burges, unhappy with the lack of information regarding Mt Gox’s withdrawal problems, attempted to confront Tibanne chief executive Mark Karpeles, which runs the beleaguered trading platform.

Bitcoin flowers for Valentine’s Day – the video

Latest bitcoin price: US$557.42 at 11.04 on Friday based on prices from BTC-e and Bitstamp

Source: Coindesk


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