Bitcoin Exchange Bitstamp Resumes Services
Bitcoin exchange Bitstamp has resumed services after an attack that saw it lose $5m in customer funds.
Bitcoin exchange Bitstamp has resumed services after having gone offline following a damaging hot wallet attack on 5th January that saw the exchange lose 19,000 BTC.
The exchange announced today that its website is once again open for business and made note of a host of new services being offered to Bitstamp customers.
Bitstamp's blog post announcing its return to business details how the exchange has rebuilt its systems "from the ground up" in an effort to prevent a repeat of its recent security breach.
Updates to the exchange service include a migration to Amazon's AWS cloud infrastructure, new hardware systems and the integration of BitGo's multi-signature wallet technology.
As a consolation for being offline in recent days, Bitstamp is also offering commission-free trading to all of its customers until 17th January at 11:59pm UTC.
Bitstamp's website indicates trading will resume at 21:00 UTC 9th January.
We are pleased to confirm that customers have resumed normal bitcoin transaction activity on http://t.co/4J0wH6JrRG
— Bitstamp (@Bitstamp) January 9, 2015
Timeline of the attack and outage
The hackers struck on Sunday, 4th January, and on Monday Bitstamp reported a hot wallet issue, advising customers not to deposit bitcoin to old addresses. Later that day the exchange revealed that it lost roughly 19,000 BTC in the breach, valued at upwards of $5m at the time of the attack.
Bitstamp said a number of wallets were compromised and, upon learning of the breach, the exchange issued warnings and started to suspend operations. Bitstamp CEO Nejc Kodrič said the breach represented a “small fraction” of the exchange’s total reserves, as the majority of the reserves are held offline in cold storage.
On Tuesday, Slovenian media reported that the site would resume operations within 24 hours, quoting Bitstamp co-founder Damijan Merlak. Merlak told Slovenian state-owned news agency STA that the exchange had enough liquid assets to meet short term-obligations and that it was in the process of setting up a duplicate infrastructure in cooperation with experts in San Francisco.
On Monday afternoon, Kodrič tweeted that the redeployment is being filled with backup data for testing, giving an ETA of 24-48 hours for the re-launch.
Our redeployment is up internally and is being filled with backup data for testing. Relaunch ETA ~24-48h. Thank you for your patience! — Nejc Kodrič (@nejc_kodric) January 6, 2015
Kodrič also used Twitter to reassure customers that their balances held at Bitstamp prior to 5th of January are safe and will be honoured in full. He went on to tweet several updates, pointing out that he still does not have an exact time for the re-launch yet.
My earlier tweet of 48 hours was a rough timeframe. We are testing our redeployed system internally before going live again to customers.
— Nejc Kodrič (@nejc_kodric) January 7, 2015
Kodrič said he would keep Bitstamp users informed via Twitter updates and the company website. The temporary site was redesigned on Thursday to include additional information and a simple promise to customers – "We are coming back soon!”
Tom Sharkey co-authored this report.
Image via Tom Sharkey for CoinDesk
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.