Bitcoin fixes Mt Gox theft bug – as exchange staff find 200,000 BTC in ‘forgotten’ wallet

Bitcoin’s developers have released a new version of the software, which includes a long-awaited fix for the “transaction malleability” bug said to have brought down large exchanges such as Mt Gox and Bitstamp.

The new version, called Bitcoin 0.9.0 was revealed by a bitcoin developer in a Tweet, according to ZDNet. The release notes say that the version of Bitcoin Core offers, “Bug fixes and new regression tests to correctly compute the balance of wallets containing double-spent (or mutated) transactions.”

The bug allowed users to alter the unique ID of BTC transactions, before they were confirmed, and thus allegedly steal coins according to ZDNet‘s report. Mt Gox blamed the “transaction malleability” bug for its loss of more than $400m in Bitcoin, and other collapsed banks and exchanges said they had fallen victim to the same bug.

VentureBeat reports that the new version of Bitcoin includes five fixes to prevent fraudulent transactions, with a function which stops “mutated transactions” being relayed, and two more functions which report double-spending and conflicting wallet transactions.

Early in March, Mt Gox admitted that nearly $500 million in bitcoin had “disappeared”, in a statement posted online, blaming abuse of the “transaction malleability” bug in the system.

The exchange, which filed for bankruptcy protection early in March, as reported by We Live Security here, posted a new message to its site on Monday, saying that bitcoins had been “illicitly moved through the abuse of a bug”, and that “Although the complete extent is not yet known, we found that approximately 750,000 bitcoins deposited by users and approximately 100,000 bitcoins belonging to us had disappeared.”

Meanwhile, questions remain over whether investors in Mt Gox will ever be able to reclaim their money. The exchange said this week that it had “found” 200,000 BTC in old wallets, during its bankruptcy procedures.

The Register commented,“That’s good news for creditors inasmuch as it means the exchange is “only” missing about 650,000 Bitcoin, so there’s some prospect of recovering some of their lost currency.”

The site said in a statement, “MtGox Co., Ltd. had certain old format wallets which were used in the past and which, MtGox thought, no longer held any bitcoins. Following the application for commencement of a civil rehabilitation proceeding, these wallets were rescanned and their balance researched. On March 7, 2014, MtGox Co., Ltd. confirmed that an old format wallet which was used prior to June 2011 held a balance of approximately 200,000 BTC (199,999.99 BTC)”