The virtual currency bitcoin suffered further price volatility on Monday as major exchange Mt Gox blamed its ongoing technical issues on a critical flaw in the cryptocurrency which it said affected all exchanges.
Bitcoin withdrawals at the Japan-based exchange were halted over the weekend as its technical team investigated a problem with the way bitcoin withdrawals are processed. In a new statement on Monday Mt Gox said it would resume bitcoin withdrawals to outside wallets once the issue had been properly addressed in a manner that would best serve its customers.
The digital currency — which is known for its wild price fluctuations — fell to around $680 on Friday morning, having traded around $850 for most of the week, according to CoinDesk, which tracks the price of bitcoin. On Monday after the statement from Mt Gox the currency fell to around $538, with investors deciding to offload further, but staged a small turnaround shortly afterwards.
Mt Gox is the third-biggest bitcoin exchange in the world, representing around 14 percent of total bitcoin trade in the last week, according to Bitcoinity.org. It said customers would still not be able to transfer bitcoins from a Mt Gox wallet to an external bitcoin address on Monday.
However, it added that a bitcoin transaction to any Mt Gox bitcoin address, and currency withdrawals (yen, euro, etc) would not be affected by this issue.
"The problem we have identified is not limited to Mt Gox, and affects all transactions where bitcoins are being sent to a third party," it said in a statement on Monday morning.
"We believe that the changes required for addressing this issue will be positive over the long term for the whole community. As a result we took the necessary action of suspending bitcoin withdrawals until this technical issue has been resolved."