News

Someone Stole $5 Million Worth of Bitcoin this Weekend

| 7 Jan 2015 00:20
Bitcoins

The second largest Bitcoin exchange service is now offline.

One of the largest Bitcoin-currency exchanges in the world is currently offline, after an unknown thief made off with $5 million of its cryptocurrency holdings.

Bitstamp, which is based in the U.K., is one of the go-to sites for people who want to store Bitcoin online, or exchange the cryptocurrency for real-world cash. Bitcoins are stored in "wallets," be it your own wallet, or a larger one controlled by a company like Bitstamp.

This weekend, Bitstamp suspended operations after "one of Bitstamp's operational wallets was compromised," early on Sunday. Bitstamp says it stores the majority of its customer's Bitcoin offline in "cold storage," meaning computer systems completely cut off from the Internet. But Bitstamp "maintains a small fraction of customer bitcoins in online systems." So 19,000 Bitcoins (worth roughly USD $5 million) is apparently a small amount. Bitstamp's full statement on the theft is included below.

Along with suspending operations, Bitstamp has asked that its customers immediately stop making "deposits to previously issued Bitcoin deposit addresses."

Bitstamp insists that, while operations are currently suspended, customers of the service will have access to their full funds soon, and no customer will lose Bitcoin as a result of the theft.

Whether or not customers will lose money is another story, however, as the theft has contributed to a sizable drop in Bitcoin's worth -- down to a low of about $260 on Sunday (compared to $314 on Saturday morning). The price has since rebounded to between $280-$285 (depending on which index you use).

While Bitstamp is assuring customers that no Bitcoin will be lost, this certainly serves as a warning that the world of cryptocurrency is fraught with peril (and no guarantees of money safety, as is afforded by many governments with more...official currencies).

Source: CNBC

January 6, 2015, 12:34am UTC: We have temporarily suspended Bitstamp services. Bitstamp customers can rest assured that their bitcoins held with us prior to temporary suspension of services on January 5th (at 9am UTC) are completely safe and will be honored in full.

On January 4th, some of Bitstamp's operational wallets were compromised, resulting in a loss of less than 19,000 BTC. Upon learning of the breach, we immediately notified all customers that they should no longer make deposits to previously issued bitcoin deposit addresses. To repeat, customers should NOT make any deposits to previously issued bitcoin deposit addresses. As an additional security measure, we suspended our systems while we fully investigate the incident and actively engage with law enforcement officials.

This breach represents a small fraction of Bitstamp's total bitcoin reserves, the overwhelming majority of which are held in secure offline cold storage systems. We would like to reassure all Bitstamp customers that their balances held prior to our temporary suspension of services will not be affected and will be honored in full.

We appreciate customers' patience during this disruption of services. We are working to transfer a secure backup of the Bitstamp site onto a new safe environment and will be bringing this online in the coming days. Customers can stay informed via updates on our website, on Twitter (@Bitstamp) and through Bitstamp customer support at support@bitstamp.net.

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