European bitcoin exchange Bitstamp suspended trading Monday after one of its active, operational bitcoin storage wallets was “compromised” over the weekend.
Bitstamp CEO Nejc Kodrič has confirmed in a statement that “less than 19,000 BTC” was stolen due to a Bitstamp operational wallet being compromised. The market value of 19,000 bitcoins represents roughly $5 million.
To restate: the bulk of our bitcoin are in cold storage, and remain completely safe.
— Nejc Kodrič (@nejc_kodric) January 5, 2015
Here’s the full statement from Bitstamp CEO Nejc Kodrič:
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. 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 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 email@example.com.”
Bitcoin charts shows Bitstamp as the third-largest bitcoin exchange handling 6 percent of transactions, behind BTCN in China with 74 percent and Bitfinex in Hong Kong with 12 percent. Like Bitstamp, Bitfinex trades in dollars.
Last February, Mt. Gox, the Japanese bitcoin exchange that had been handling 70 percent of all bitcoin transactions,was forced it into bankruptcy after an estimated $450 million disappeared, although 200,000 of the 850,000 missing bitcoins were later found.
VentureBeat reported the Bitstamp hack comes on the heels of a 70 percent drop in bitcoin values in 2014. Bitcoin value fell to $267 Monday from a high of $1,240 before the Mt. Gox collapse, ZDNet reported.
Nejc Kodric has publicly said that Bitstamp attempts to keep between 85 percent and 90 percent of its customers’ funds in cold storage, which means that as much as 10 percent to 15 percent would be at risk.
Despite the volatility of bitcoin and once seen as an unstable digital currency used by criminals, many companies still support it. Firefox browser-maker Mozilla supports the digital currency for donations, and Time Inc. accepts bitcoin for subscriptions. Several months ago computer maker Dell began accepting bitcoin. Microsoft became the latest technology company to support the digital currency for its Xbox and Windows store platforms.
Coinspeaker will continue to monitor this story and post update as it become available.