Bitstamp has reopened for business. It had been offline since last Monday when its hot wallet was compromised and roughly $5 million worth of bitcoins were stolen.
In an e-mailed update to clients, CEO Nejc Kodrič stated that the exchange halted service for several days in order to rebuild its systems “from the ground up from a secure backup.” The changes include the implementation of BitGo’s multisig wallet, whose security scheme makes it far more difficult for hackers to successfully penetrate. It was designed for enterprise-scale businesses handling large volumes that require more sophisticated security and treasury operations.
They have also updated to new hardware using a secure backup of the exchange’s codebase and data. The new operation is running on Amazon’s AWS cloud infrastructure, which is considered highly secure and reliable.
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In being the most prominent exchange to have been successfully attacked since MtGox, the question now becomes if traders will continue to trade on it as in previous days. Since resuming business roughly 48 hours ago, total volume has actually been well above its previous norm. However, most of the volume was concentrated during the first 4 hours of trade, at some points hitting 6,000 BTC/hour. Thereafter, volumes tapered to 100-200 BTC/hour.
In a strategic effort to attract business, Kodrič said that all trades will be commission-free until after the North American Bitcoin Conference in Miami, which ends on January 17.
The resumption of trade was indeed chaotic, with the traded price whipsawing between $275 and $305 during the first hour – a range of over 10%. The choppy trade was most probably a result of its sudden resumption and the settling of a wide range of built-up orders, as opposed to general volatility in the bitcoin markets. Prices on BTC-e ranged between $279 and $292, likely a secondary reaction to the activity on Bitstamp.
Kodrič again stressed that all losses will be fully reimbursed from reserves held in its cold wallet.