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Bitcoin Clampdown: Major Exchange Enforces User Checks

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Bitcoin fans learned that one of the virtual currency's major exchanges will enforce customer verification checks from Thursday, two days after U.S. authorities revealed they had shut down a rival digital money transfer company.

(Read More: US Busts Bitcoin-Like System Liberty Reserve in Costa Rica)

Mt. Gox, the world's biggest Bitcoin exchange, announced on Thursday it had altered its code of conduct, meaning now users must now verify themselves to perform any currency deposits or withdrawals.

"Beginning May 30, 2013, all Mt. Gox user accounts are required to be verified, in order to perform any currency deposits and withdrawals," said Tokyo-based Mt. Gox, in a press release on its website.

"The Bitcoin market continues to evolve, as do regulations and conditions of compliance for Mt. Gox, to continue bringing secure services to our customers. It our responsibility to provide a trusted and legal exchange, and that includes making sure we are operating within strict anti-money laundering rules, and preventing other malicious activity."

Bitcoin users expressed their opinion on Mt. Gox's Facebook page after the announcement, expressing a mix of delight and anger.

"This is good, every improvement of security is good," Martin Wiszczor wrote. However, Greg Fultz vented his frustration in the same post. "So much for unregulated currency," he said.

Bitcoin is a virtual currency that allows users to exchange online credits for goods and services. While there is no central bank that issues them, bitcoins can be created online by using a computer to complete difficult tasks, a process known as mining.

(CNBC Explains: Bitcoin)

Mt. Gox's security has come under fire from users recently, after a series of hacking attacks, called distributed denial-of-service attacks (DDoS), delayed orders and panicked sellers, leading to price crashes.

While Thursday's move may not end the hacking attacks, it may placate U.S. regulators in the short-term, after the closure of Liberty Reserve, which is based in Costa Rica.

(Read More: After Government Raid, Jittery Future for Bitcoin)

Five people associated with Liberty Reserve were arrested last Friday and bank accounts were seized. In a statement, officials said Liberty Reserve had been widely used around the world by cyber-criminals.

(Read More: Bitcoin Great for Narco-Dollar Traffickers: Pro)

Mt. Gox, which claims to handle over 80 percent of all Bitcoin-U.S. dollar trades, has suffered its own share of drama. The U.S. Department of Homeland Security seized its bank account earlier in May, saying it had not property registered as a money services company when it opened two years ago.

By CNBC.com's Matt Clinch; Follow him on Twitter @mattclinch81

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