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

By January 5, 2015 Bitcoin Entertainment
Click here to view original web page at www.coindesk.com
Road block
Road block

Bitstamp announced today it had "detected problems" with its hot wallet, saying it had stopped 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.

Concerns mounted over Bitstamp's apparent silence. At press time, the company had not yet issued any further details or explanation as to what had happened, while the twitter accounts of Bitstamp and CEO Nejc Kodrič show no recent updates.

CoinDesk has reached out to Kodrič but has so far not received a response.

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 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:

Bitstamp message to customers
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.

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.

Concerns mounted over Bitstamp’s apparent silence. At press time, the company had not yet issued any further details or explanation as to what had […]

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