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Largest Bitcoin exchange halts trading after tumultuous price fluctuations

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bitcoin 1020 (casascius)
bitcoin 1020 (casascius)

Major Bitcoin exchange Mt. Gox is shutting down trading for 12 hours following wild fluctuations in the currency's valuation yesterday. The exchange handles three-quarters of all Bitcoin trading, and inaccurate reports of a DDoS attack on its website lead to a mass selling of the digital currency, causing its price to rapidly rise and fall. Though no DDoS attack had actually occurred, the large influx of sales was enough to disrupt Mt. Gox's website, and the exchange is now upgrading its systems to better handle the higher trading volume. It's referring to the break as a "market cooldown," which tellingly should also allow the Bitcoin economy a period of time to recover after a week of rapidly rising prices and ultimately unstable valuations.

This quick rise in price continues to make Bitcoin an increasingly popular target for hackers. TechCrunch reports that one new exploit immediately transfers Bitcoins from a person's Mt. Gox account after they click on a link that appears to be an official page from the exchange. Last week saw both a phishing attack on users of Bitcoin banking service provider Coinbank and a rapidly spreading piece of malware that took over infected computers and began using them to mine Bitcoin. Though the increased price of Bitcoin is creating this appeal, the threat of hacking has historically been a cause of Bitcoin's price declines. The currency's first major crash occurred in 2011, after a hacker stole around $9 million in Bitcoin from Mt. Gox. Trading will resume on the exchange this evening at 11PM ET.

Update: After returning online, Mt. Gox reported to The Verge that it there had in fact been DDoS attacks over the past two days.