Second Bitcoin exchange halts withdrawals following hack attack

A Bitcoin exchange firm in Slovenia reportedly halted withdrawals of the virtual currency after discovering a hack attack on its systems.

Bitstamp, one of the world's largest exchanges of the virtual currency announced that hackers had exploited a bug in Bitcoin's underlying software to carry out the assault.

According to the BBC, Bitstamp is the second exchange, after Tokyo's MtGox, to suspend operations.

Another exchange, Bulgaria's BTC-e, has warned that some of its transactions might be delayed due to Bitstamp-like denial-of-service (DoS) attack.

Chief scientist at The Bitcoin Foundation, who maintain and promote the cryptographic code on which the currency relies, Gavin Andresen, said that the DoS attack had not been aimed at stealing coins but it has succeeded in preventing some transactions from confirming, adding that people's savings were safe, albeit 'tied up'.

The report said that the cause of the problem is an issue called 'transaction malleability,' which involves someone changing the cryptographic code, used to create an ID for the exchange of funds, before it is recorded in the database of every transaction carried out in the currency, blockchain.