Update: Google Chrome team says KryptoKit takedown was a mistake, result of malware

Yesterday, Google’s Chrome team removed and automatically uninstalled popular browser-extension bitcoin wallet KryptoKit, leaving thousands of users without access to their bitcoins. Google cited vague “terms of service” violations as the cause, but otherwise provided no explanation for their actions. The developers quickly cried foul over the move, and within hours Google relented, restoring the Chrome extension without any changes made to the original KryptoKit code. Google’s aggressive takedown action, usually reserved for only the most malicious of malware, prompted much speculation in the bitcoin community that an Apple-like crackdown on bitcoin-related services was in the making.

Last night, however, Google’s Chrome team came clean on Reddit: It was a mistake.

Google Chrome Product Manager Tyler Odean posted a simple timeline of events leading up to the ban. According to Odean, a malware developer posted a hacked version of the KryptoKit extension hoping to steal private wallet keys. Because the code was nearly identical to the legitimate version, Google’s automated anti-malware system flagged and blacklisted both extensions. When the Chrome developers became aware of the situation hours later, they reinstated the legitimate KrytoKit extension.

Odean insists that only the extension’s access to Chrome was blocked by this move, and that at no point was any data removed from user machines. The wallets were safe on hosted machines, they just appeared to be inaccessible.

The post also came with a clarification about Chrome’s policy towards bitcoin in general, which should soothe the nerves of many who were concerned that Google might be implementing an anti-cryptocurrency move. Given that Apple has completely banned nearly all bitcoin-related apps from their App Store only a few months ago, such a move is not implausible.

Obviously this is a learning experience for us and we are continuing to perfect our protections in the webstore. But we wanted to emphasize that we are definitely not seeking to limit Bitcoin extensions in general or the kryptokit extension in particular – but rather trying our best to keep users safe from malicious exploits.