Bitstamp Expected to Resume Trading Within Hours

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This story originally appeared on Reuters

Bitstamp, one of the largest exchanges for the digital bitcoin currency, said on Wednesday it expected to resume trading within 24 hours after suspending operations because of a security breach on Sunday.

Customers would not lose money because of the breach and security would be increased, said Damijan Merlak, one of Bitstamp's two Slovenian founders.

Bitstamp had suspended its service after the breach resulted in the loss of around 19,000 bitcoins with a value of some $5 million.

"Trading will resume as soon as the new infrastructure will be in place and tested. We expect that is likely to happen within the next 24 hours," Merlak told Reuters in an emailed message on Wednesday.

"In the future we will strengthen security measures while the most important thing for clients is that they will suffer no financial damage as that will be covered by our company," Merlak added.

He gave no further details of the problem.

Last February, Bitstamp claimed that developers had come up with a solution to thwart cyber attacks against its platform after Mt. Gox, once the world's biggest bitcoin exchanges, lost an estimated $650 million worth of the virtual currency when its computer system was hacked.

The Bitstamp breach represented a small fraction of its total bitcoin reserve and the majority was held in secure offline systems, the Slovenia-based firm posted on its website on Tuesday.

Bitstamp had said it believed one of its wallets, which store the digital credentials for a customer's bitcoin holdings, had been compromised.

It had notified all customers after learning of the breach, requesting them not to make any deposits to previously issued bitcoin deposit addresses.

Bitcoin, the best-known virtual currency, started circulating in 2009. Unlike conventional money, bitcoin is generated by computers and is independent of control or backing by any government.

A bitcoin is currently worth $276.80 BTC=BTSP.

Merlak is one of two Slovenians who founded Bitstamp in 2011. The company has made its two founders millionaires, according to the Slovenian media.

(Reporting By Marja Novak; editing by Keith Weir)

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