Bitcoin Private Fraud Allegations Causes BTC Trading to Stop


In recent news, Bitcoin Private has been called out on for fraud by CoinMetrics due to a serious anomaly for supplies of the ZClassic/Bitcoin cryptocurrency. The researchers managed to uncover that an estimated amount of 2 million digital assets were injected into developers wallets when the currency’s blockchain was being established.

Bitcoin Private was originally pleading that these allegations weren’t true, but as of today,  they’ve confirmed that CoinMetrics was speaking the truth. The development team currently has no clue on where the extra assets ended up going too. CoinMetircs has stated that somewhere around 300,000 of said coins have already manage to move around through various exchanges.

Bitcoin Private admitted in a blog post, that it has managed to conduct a complete audit on this situation and has determined that the blame can be placed on one of their developers. This developer goes by the name of airk42. The said developer has not contributed to Bitcoin Private since claiming a bounty and completing an “issue” they were undergoing, which was to tweak the import so that Bitcoin Private could “add arbitrary transactions as coinbase inputs at a given block height.”

The developer completes the issue, merges his own code, and is sent his reward. One line of code is missing which allows the fork mine to be exploited due to the nodes not properly verifying the falsified fork blocks. […] The missing line of code is as follows: || tx.vout.size() > 1. We determined this after the CoinMetrics report was released.

Bitcoin Private has gone off to say that they do not believe the developer has manage to exploit their own mistake. However, they do believe a currently unidentified “bad actor” took advantage of this recently discovered bug during the establishment of BTCP blockchain.

During the publicly announced fork mine, a bad actor exploited this bug, creating 2 million coins. It went unnoticed by the contribution team until it was uncovered by CoinMetrics.

Our Thoughts

Bitcoin Private will definitely have troubling time recovering from this. Who knows what kind of negative affects this could lead for the market and consumer in the coming future. Hopfully they’ll manage to catch the person who’s exploiting the bug they’ve manage to discover.


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Keith Wang

Keith Wang is a writer and programmer specializing in bitcoin and blockchain technology. Keith has been a long time believer of bitcoin and blockchain technology and spends his free time following up with blockchain news. You can contact Keith at keith@cryptomenow.com

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