BitStamp Bitcoin Transactions Being Traced?

By May 6, 2015Bitcoin Business
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BitStamp Bitcoin Transactions Being Traced?

Incoming and outgoing bitcoin transactions at BitStamp exchange seem to be traceable, as a recently discovered issue showed that the change address is being logged. This was found by bitcoin security firm BlockTrail, which conducted a review of the exchange activity for internal purposes.

According to BlockTrail CTO Ruben De Vries, a group of addresses had the same output, which turned out to be the address created to send remaining bitcoin leftover from a transaction. BlockTrail CEO Boaz Becher added that this gave a picture of BitStamp’s activity, including deposits and bitcoin transactions.

Bitcoin Transactions Anonymity & Security

Bear in mind that one of the prominent features of bitcoin is its anonymity. With this issue, however, transactions from the client-side and counterparty might wind up getting exposed.

Bitcoin software provider BitGo could have access to this critical information and BlockTrail has already submitted a proposal to fix the issue. However, BitGo still hasn’t implemented any changes so far this week. For BitGo CTO Ben Davenport, the issue isn’t a huge deal but he acknowledged that they have been aware of the issue for some time.

“The primary reason we haven’t changed it sooner is that BitGo currently relies on the change output being last to determine which output of a transaction is change when listing transactions,” Davenport explained. “This was needed due to missing functionality in our back-end transaction indexer which has been remedied in the last few weeks.”

Aside from that, BitGo mentioned that security shouldn’t be a problem since they implement a multi-sig security feature on their platform. The adoption of multi-sig in wallets has been low so far though, which means that BitGo has already found it easy to identify the exchange’s change address for quite some time and no problems have come up from this issue yet.

According to BlockTrail CTO Ruben De Vries , a group of addresses had the same output , which turned out to be the address created to send remaining bitcoin leftover from a […]

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