Online currency Bitcoin loses most of its value due to exchange hack

In addition to manipulating the Bitcoin price, the hackers published the user names, email addresses, and encrypted password data from Mt. Gox’s database, according to the online exchange.

The exchange said that an “account with a lot of coins was compromised and whoever stole it (using a [Hong Kong] based IP to login) first sold all the coins in there, to buy those again just after, and then tried to withdraw the coins. The $1000/day withdraw limit was active for this account and the hacker could only get out with $1000 worth of coins.”

When it discovered the breach, Mt. Gox suspended trading and locked all its accounts.

Mt. Gox explained that “it appears someone who performs audits on our system and had read-only access to our database had their computer compromised. This allowed for someone to pull our database.” The exchange added that the database compromise was not the result of an SQL injection, as had been reported by some media outlets.

The exchange said that once it is back online, trading on Bitcoins will revert to the level before the breach, that is, $17.50 per Bitcoin. The value of the currency had plunged to pennies as a result of the hack. Users will be required to enter a new password once trading resumes.

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