Bitcoin’s value slumped on Friday from $700 to $540 after Mt. Gox the largest Bitcoin trading exchange announced there is a flaw in the software that allows fraud.
On Friday Mt. Gox suspended all transfers to external Bitcoin addresses after unusual activity was detected. The exchange confirmed that criminals had fooled the software into sending transactions twice.
Mt. Gox has seen its popularity decline over the last 12 months as new competitors including BTC China, Bitstamp and BTC-e entered the market.