Bitcoin exchange Bitstamp suspends service after security breach

By Reuters

Jan 06, 2015 07:14 AM EST

Bitstamp, one of the largest exchanges for trading the digital bitcoin currency, said it has temporarily suspended service after "some" of its "operational wallets were compromised" on Sunday, resulting in loss of about 19,000 bitcoins.

The breach represented "a small fraction" of its total bitcoin reserve and the majority was held in secure offline cold storage systems, Bitstamp posted on its website on Tuesday. (bit.ly/1eTIPEt)

The Slovenia-based firm - which said on Monday it believed one of its operational wallets had been compromised - did not give further details on the breach.

Bitstamp said on Tuesday it had notified all customers after learning of the breach, requesting them not to make any deposits to previously issued bitcoin deposit addresses.

"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 honored in full," the exchange said.

Bitcoin, the best-known virtual currency, started circulating in 2009. Unlike conventional money, bitcoin is generated by computers and is independent of control or backing by any government.

In February, Bitstamp claimed that developers had come up with a solution to thwart cyber attacks against its platform after Mt. Gox, once the world's biggest bitcoin exchange, lost an estimated $650 million worth of customer bitcoin when its faulty computer system was hacked.

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