European bitcoin marketplace Bitstamp hacked, US$5m of bitcoin stolen

6 Jan 2015

European bitcoin exchange Bitstamp has suspended activities after it emerged the exchange was hacked, with hackers having stolen some 19,000 bitcoins worth US$5m.

The exchange, believed to be the world’s third busiest bitcoin exchange, has warned users not to deposit any bitcoin to previously issued addresses.

In a statement on its site it said: “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.

“To repeat, customers should NOT make any 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 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 compromise of Bitstamp comes almost a year after it emerged that Mt. Gox crashed after some 850,000 bitcoin worth close to US$450m were stolen.

The breach of Mt. Cox’s systems by unnamed hackers ultimately led to the company’s bankruptcy, a halving in the value of bitcoin worldwide and a steady decline in the value of bitcoin crypto currency.

Bitcoin security image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years