Bitstamp Halts Bitcoin Withdrawals Due to Hot Wallet Bug, Deposits Not Showing Up

Update, Jan 5, 2014 10:57 GMT: Bitstamp's homepage is inoperational and service appears to have been halted. The message reads:

"We have reason to believe that one of Bitstamp’s operational wallets was compromised on January 4th, 2015.

As a security precaution against compromises Bitstamp only maintains a small fraction of customer bitcoins in online systems. Bitstamp maintains more than enough offline reserves to cover the compromised bitcoins."

It goes on to reassure customers that any losses will be covered by reserves. Users are again warned not to make new deposits, which the exchange says it will not cover if lost.

Traders on the Bitstamp exchange have grown concerned over reported issues with its hot wallet.

Several hours ago, users reported making Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term deposits which initially lagged several confirmations behind in the Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term processing queue, and then disappeared from the incoming transactions log entirely without updating balances.

Not long after, Bitstamp sent out the following update to its customers:

"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"

Fears of last year's MtGox collapse are lurking in the back of the minds of some traders, although Bitstamp did say that its cold wallet is fine.

In the past, Bitstamp has been fairly proactive in defending against malicious activity, such as during phishing attempts in August and the Heartbleed bug in April.

According to bitcoinity.org, Bitstamp currently ranks fifth in global bitcoin trading volume, commanding 5% of the market.

Counterintuitively, bitcoin prices on Bitstamp are about 1% higher than on its peers. Its spread above BTC-e is above average at $6.60 (2.4%). Traders suspecting the security of their bitcoin holdings would typically drive prices downward on the venue in question.