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Bitstamp Bitcoin Exchange Suspended Due To "Compromised Wallet"

Posted by samzenpus on from the that-old-familiar-story dept.

twitnutttt writes Customers of Bistamp, the successor (until recently) to MtGox as the highest-volume dollar-denominated Bitcoin exchange, and still the preferred source of trading data for many technical analysts, sent an email at about 4:00 UTC today warning that, "Today our transaction processing server detected problems with our hot wallet and stopped processing withdrawals." They also instructed users to stop sending any deposits immediately or they may be lost. The Bitstamp website has now also suspended all exchange/trading services, and the homepage contains only a maintenance message warning users of a "compromised" wallet. Numerous references to security imply that this is a hacking attack, but Bitstamp reassures that they maintain "more than enough offline reserves to cover the compromised bitcoins."

10 of 161 comments (clear)

  1. Soundtrack contest by Sarten-X · · Score: 5, Funny

    I now have "Another One Bites The Dust" in my head.

    Anybody have any better music suggestions appropriate for this story?

    --
    You do not have a moral or legal right to do absolutely anything you want.
  2. I can't tell you how relieved I am. by fuzzyfuzzyfungus · · Score: 5, Funny

    It's a terrible sign of the times that this is so; but it's so goddamn heartwarming to see that we at least have some financial institutions around that aren't too big to fail...

  3. Somehow banks... by TWX · · Score: 3, Insightful

    ...with the regulations in place that generally put limits on their bad behavior, aren't looking so bad now, are they?

    And for those who want to go off on overdraft fees, you can have your account set to simply not let you go overdraft. It'll deny any transactions that would let you overdraft though, so it's a catch-22.

    I have no love for big banks, but at least there are rules governing how my accounts are handled, they can't brazenly steal all my money in one swoop.

    --
    Do not look into laser with remaining eye.
    1. Re:Somehow banks... by Anon-Admin · · Score: 3, Insightful

      Right, regulations help.

      Back some years ago I was using a bank that over drafted me. I say they over drafted me because they showed an ATM withdraw some 50 miles from where I was that caused my account to over draft.

      I had paid the overdraft fees and explained to them that I could not have been there to withdraw the $62 they claim. The lady tells me that as per bank policy I am responsible for the first $50 lost from the account and there would be a $10 "search" fee for them to research what had happened and determine if I had withdrawn the money or it was a bank error. My simple question, "If it turns out to be a bank error do i get my $52 back?" Well no, as per policy I was responsible for the first $50 lost so I would only get $2 back.

      I told them to do the research, give me my $2 and close my account. The bank persons response, "Absolutely, there is a $2 filing fee to start the search, $10 for the search, and you are responsible for the first $50 lost. Then there will be a $15 fee to close out your account."

      It amazes me how they lost the exact amount that it would require to $0 out. I close that account and simply moved of. The moral of this story is you may have faith in religion, with all others watch your ass because they will take all they can get.

    2. Re: Somehow banks... by Anonymous Coward · · Score: 3, Informative

      The solution isn't regulation.

      The solution is innovation.

      These 1st generation exchanges don't use multiparty keys. So they have to keep all the bitcoins on hand. This makes them big fat targets.

      Gen 2 exchanges will be decentralized and use m of n keys to protect the funds and simultaneously NOT hold the funds on hand themselves.

      Very smart people are already working on this problem.

      The LAST thing we need is red tape screwing up the innovation economy.

      Decentralized exchanged already exist in one form or another. They just aren't as popular.

    3. Re: Somehow banks... by jellomizer · · Score: 3, Insightful

      Innovation like being able to have low interests on a high risk loan. By selling fractions of that loan across many organizations so the liability of any one loan isn't so great.

      This seemed like a good idea at the time. The person getting the loan can get a low interest payment, the person who is selling the loan can get the commission for the loan, the sub prime lenders make out as they get for the most part their money back....
      Just as long as the economy doesn't sink, and those high risk individuals start dropping out in droves. Meaning you have a lot of assets in high risk loans which are failing.
      Because while the risk was reduced for the individual purchase, the risk was increased over the aggregate.

      Now during the boom time, this was seen by most people as a good thing. They were worrying about the housing market to pop, but not on the fact the lenders were loading up on high risk loans. Because as most people saw it. That these people can get low interest rates for homes, thus improving the number of home owners that can build wealth over time.

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
  4. Re:Utterly predictable by jareth-0205 · · Score: 3, Insightful

    With the massive caveat that real money banks are backed and insured at the state-level (atleast in Europe, where most governments guarantee a certain amount of savings), while who the hell knows how well these websites are capitalised and secured.

  5. Re:Bitcoin still seems sleazy to me by gstoddart · · Score: 3, Informative

    The entire notion of bitcoin has always seemed a little sketchy to me.

    We're going to make up a money, and we're going to simultaneously claim it's secure and private, but we'll attach every transaction to the history of the money -- and then put it in the hands of any old schmuck who makes a website.

    We'll claim to be an awesome alternative to government issued money, free of regulations and taxation, but we'll still try to be honest players (we promise). And a fucking pony.

    The whole ecosystem seems like a pipe dream, which completely ignored reality, and has been subject to fraud and abuse for pretty much as long as I've been aware of it. FAR worse than the 'real' financial system.

    So, whine all you like about the tyranny of government issued money ... you mostly sound insane, and have gotten into an overhyped, and apparently completely insecure currency.

    The first time I heard of BitCoin I thought "what the heck is this for?". And pretty much every time I've heard it since, I've found myself thinking it sounds pretty sketchy.

    I'm sure people will rabidly defend it, for whatever reasons they have ... but, seriously, every time I hear about BitCoin it's because it's not living up to any of the expectations, and you're putting your money into a completely unregulated pool with dodgy players.

    So, I'm afraid I continue to be underwhelmed by the existence of Bit Coin, and mostly keep laughing my ass off when people lose their shirts.

    Don't believe the hype.

    Me, I'll stick with my bank, which operates under identifiable laws, using currency for which there is at least a pretense for the valuation and exchange rates, and involving players with many more years of proven ability to actually play this game.

    But, hey, feel free to put your money wherever the hell you like.

    --
    Lost at C:>. Found at C.
  6. Re:No price move by jeremyp · · Score: 3, Informative

    In fact, according to http://www.coindesk.com/price/ the price has dropped about 15% in two days.

    --
    All I want is a secure system where it's easy to do anything I want. Is that too much to ask ~~ Randall Munroe
  7. I prefer my money to be stolen the old fashion way by JoeyRox · · Score: 3, Funny

    By banks and governments, thank you very much.