Second Largest Bitcoin Exchange, BitStamp, Hacked, $5M Stolen, Insider Knowledge of Theft Suspected

The U.K.-based second-largest dollar-bitcoin exchange, Bitstamp suspended operations early Monday, signaling what some are calling a watershed moment for Bitcoin and other cryptocurrencies in general.

The exchange has halted withdrawals and cautioned customers from making deposits following what it implied was a security lapse.

Still, some have argued that this could be an excuse for a larger liquidity problem after the weekend’s big drop in bitcoin’s price. The price of bitcoin dropped into the $250-range on Sunday after trading for weeks in the mid $300s.

The blockchain links below shows all the transactions that’s suspected to be BitStamps coins being moved to another wallet. It shows a total of 19000 Bitcoins which has a current value of $5 Million.

Before this alleged hack was made public, Adam Guerbuez, a Bitcoin enthusiast tweeted saying “Getting Geared up for some big new concerning bitcoin”.

This tweet has led many to believe that the hack may have something to do with insider trading, even though there has not been any officially verified yet, the tweet come just hours before BitStamp operations were shutdown.

The CEO of Bitstamp has released an official statement regarding the alleged hack, the statement reads:

Bitstamp customers can rest assured that their bitcoins held with us as 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 protected].

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