$5 million stolen from Bitcoin exchange Bitstamp in hack attack

Bitcoin by zcopley on Flickr
Credit: zcopley / Flickr

Less than a week into the new year and we have our first major cyber-crime: Slovenian Bitcoin exchange Bitstamp was hacked yesterday, and has suspended its service for the time being, reports ZDNet.

According to a message on its homepage, Bitstamp noted that one of its operational wallets was compromised on Jan 4, and subsequently suspended its service. Less than 19,000 BTC (worth about $5 million; one BTC is about $270) was stolen.

The company says that the majority of its funds are held in ‘cold storage’, on offline machines that can’t be accessed over the Internet — and only a fraction of coins used for frequent transactions online have gone missing. It has asked its customers not to make any deposits to previously issued Bitcoin addresses, so as to prevent further losses. Bitstamp has also said that all customers’ “balances held prior to our temporary suspension of services will not be affected and will be honored in full.”

Bitstamp hasn’t yet revealed any other details about suspects behind the breach or when their service will be up and running again. In the meantime, CEO Nejc Kodrič issued an apology via his Twitter account:

Kodrič also told WIRED that his company is cooperating with law enforcement agencies to uncover the culprit behind the attack, and is “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.”

The news will certainly deal another blow to Bitcoin’s already tarnished status, after Japanese exchange Mt. Gox lost over half a billion dollars in a hack attack and liquidated itself, and the currency’s value came crashing down from over $1,000 in 2013 to about a quarter of that at present.

However, that’s not to say that Bitcoin is completely losing ground. Microsoft began accepting the cryptocurrency for digital purchases from Windows, Windows Phone, Xbox Games, Xbox Music, and Xbox Video stores in the US last month. This breach might just serve as a reminder that no digital assets are secured easily in 2015, and that stringent measures must be put in place.

We’ll keep an eye on developments over at Bitstamp for updates.

➀ Bitstamp exchange hacked, $5M worth of bitcoin stolen [ZDNet]

Featured image: Zach Copley

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