How did the once-largest Bitcoin exchange lose hundreds of
millions of dollars’ worth of the digital currency?
Two words: transaction malleability. A hacker can tinker with the
code that makes a Bitcoin transaction happen, so that it looks
like it didn’t go through. The person who was supposed to receive
a payment then asks again and, in Mt. Gox’s case, is paid again
automatically. Mt. Gox has acknowledged this was happening. It
seems that someone has been slowly bleeding it for months, leaving
it without the funds to pay out legitimate withdrawals. But with
the company being pretty tight-lipped about it for now, that’s
only the best theory.