bitstamp-security

Bitcoin exchange suspends service amid security breach

One of the largest trading exchanges for the digital bitcoin currency has suspended its service after a security breach that resulted in money losses, it was announced.

Bitstamp, the bitcoin exchange, said on its website on Tuesday that a small fraction of its total reserve – amounting to 19,000 bitcoins – has been tampered with and although the majority was held in secure offline systems its services were temporarily suspended. 

Damijan Merlak, one of the company’s founders, told Slovenian state-owned news agency STA that Bitstamp has enough liquid assets to meet its short-term obligations.   

"At present we are setting up a duplicate of the whole infrastructure with experts in San Francisco which should be finished within 24 hours. Then we will be able to resume our services," Merlak told STA.

Although no further details were given on the incident due to an ongoing investigation, it is believed that the digital credentials for a customer’s bitcoin holdings had been compromised. Customers were advised to hold off on any deposits to previously issued bitcoin deposit addresses, according to Bitstamp.

“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 honoured in full,” said the exchange.

The increasingly attractive cryptocurrency has seen a sharp fall in value after MtGox – one of the biggest online exchanges – suddenly shut down in February, owing hundreds of millions of pounds.

Bitcoin lost half of its value over the year crashing from the peak of $1,100 to the current position $330, and according to Bloomberg it was voted 2014’s worst investment.

A bitcoin is currently worth $275.73.

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