Bitstamp Reports Hot Wallet Issue, Tells Customers to Not Deposit Bitcoin

There was concern over popular exchange Bitstamp when it warned customers not to deposit bitcoins to previous addresses, and stopped some withdrawals.

AccessTimeIconJan 5, 2015 at 8:16 a.m. UTC
Updated Apr 10, 2024 at 2:51 a.m. UTC

UPDATE (5th January 09:43 GMT): Bitstamp has been temporarily suspended from the CoinDesk Bitcoin Price Index as its API has been unavailable since 09:13 GMT.

UPDATE (5th January 09:40 GMT): Statements from Bitstamp have been added to this article.

Bitstamp announced today it was suspending services after it "detected problems" with its hot wallet, initially stopping withdrawals and warning customers not to attempt bitcoin deposits.

Once again, confusion reigned on bitcoin discussion forums as interested parties speculated on what and how large the problems might be at the world's second-busiest USD exchange.

The company has now replaced its regular main page with a statement saying "we have reason to believe that one of Bitstamp’s operational wallets was compromised on January 4th, 2015".

It warns customers not to make deposits to previously-issued bitcoin addresses, stating in bold text that deposits to these addresses "cannot be honored", but reassured them that it holds a large majority of its bitcoins in cold wallets, and had ample supplies to cover any deposits made before 5th January, 2015, 9:00 UTC.

Bitstamp takes our security and soundness very seriously. In an excess of caution, we are suspending service as we continue to investigate. We will return to service and amend our security measures as appropriate.

Worries at silence

Concerns had mounted for hours over Bitstamp's apparent silence. At 9:27 GMT, however, CEO Nejc Kodrič calmed some nerves by tweeting the following apology:

Stop sending bitcoins

The issue first came to attention when reddit user 'Tsuyoku Narital' posted that he had attempted to deposit bitcoins twice to a Bitstamp account, but the amounts had vanished before reaching his balance.

After the user contacted Bitstamp's customer support, he received the following emailed reply:

Dear customer,

Today our transaction processing server detected problems with our hot wallet and stopped processing withdrawals.

You should STOP SENDING bitcoin deposits to your Bitstamp account IMMEDIATELY as private keys of your deposit address may be lost.

Your bitcoins already deposited with us are stored in a cold wallet and can not be affected.

We will send you more info as soon as possible.

Best regards,

Bitstamp team

It also posted the following message on users' main Account Balances page:

 Bitcoin customer account page
Bitcoin customer account page

The phrase "previously provided addresses" led some to wonder if Bitstamp was suffering the kinds of problems with re-used random number values that plagued Blockchain wallets a couple of weeks ago.

Bitstamp's reputation

Slovenia-based Bitstamp became the world's busiest USD bitcoin exchange in July 2013 when it overtook the troubled Mt Gox. It has since lost that crown to Hong Kong's Bitfinex. The three busiest bitcoin exchanges in the world by total BTC traded per day are BTC China, OKCoin and Huobi.

The company has generally been respected within the bitcoin community. In May 2014 it passed a proof-of-bitcoin-reserves audit overseen by BitcoinJ developer Mike Hearn, and in June it beat other bitcoin companies to win the Europas' Best Virtual Currency Startup Award.

CoinDesk will continue to monitor this developing story and post updates as they become available.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.