Mt. Gox Blames 'Transaction Malleability' for Insolvency Issues
Mt. Gox issues a press release blaming its withdrawal problems on a long-known bug in the Bitcoin protocol called 'transaction malleability,' an explanation quickly refuted by developers.
In a desperate attempt to explain its catastrophic failure to process withdrawals, Mt. Gox publicly blamed a flaw in the Bitcoin protocol itself known as 'transaction malleability.' This bug allows for a transaction's unique ID to be altered before it is confirmed on the blockchain without invalidating the transaction.
Mt. Gox claimed this bug was being exploited by hackers to make it appear as if withdrawals had not been processed, tricking the exchange into re-sending funds repeatedly. However, prominent Bitcoin core developers, including Gavin Andresen and Andreas Antonopoulos, immediately pushed back. They clarified that transaction malleability was a well-known edge case that competent exchange software should have already been designed to handle properly.
They framed the issue not as a flaw in Bitcoin, but as a fatal flaw in Mt. Gox's own custom, poorly-coded software. This explanation was widely seen as a disingenuous attempt by Mt. Gox to deflect blame for its own incompetence and likely insolvency.The incident highlighted the importance of robust engineering in the cryptocurrency space.