Bitcoin Exchange Bitstamp Suspends Operations Following Hack

Bitcoin Exchange Bitstamp Suspends Operations Following Hack
Image credit: Antana | Flickr

Updated 5:15 p.m. ET with statement from Bitstamp

Fueling fears of a Mt. Gox-caliber meltdown, Bitstamp -- the world’s second most-trafficked USD bitcoin exchange -- ceased operations today in the wake of a hack.

The Slovenia- and UK-based bitcoin marketplace temporarily halted withdrawals, then later completely shut down, after discovering that some of its operational “hot wallets” were compromised yesterday.

Related: Bitcoin Named Worst-Performing Currency of 2014

In a statement to Entrepreneur late Monday, Bitstamp said that less than 19,000 BTC, or about $5.1 million at today's pricing, was lost and assured that all customers will be able to recover the balances they held before service was halted. "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."

The site is being transitioned onto a "new safe environment" and is expected to resume service in coming days, the company said. 

Related: Microsoft Is Now the Largest Company in the World to Accept Bitcoin

The trouble at the popular exchange couldn’t come at a worse time for the ultra-hyped virtual money, only days ago dubbed the world’s worst-performing currency of 2014. Today its price fell below $270, the cryptocurrency’s lowest value since 2013. According to the CoinDesk Price Index, which Bitstamp was just temporarily suspended from, Bitcoin is currently trading at $270.

Related: Where to Stash That Cryptocash? This Man Put It Under His Skin.

Edition: November 2016

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