Bitstamp and other Bitcoin Exchange Services Suffer from Hacking AttacksJan 08, 2015

Bitstamp

Bitstamp

Following reports of a hacking activity on UK-based Bitcoin exchange Bitstamp last January 5, the company announced that all its services will be temporarily suspended until it has resolved security predicaments. The company also warned users not to send deposits to previously issued Bitcoin deposit addresses.

As a security contingency measure, Bitstamp only keeps a small fraction of customer bitcoins in their online systems. Large portions are maintained as offline reserves, thus, the company has more than enough to make up for the lost bitcoins.

Though customers are supposed to be relieved by this, it still doesn’t change the fact that the company has been down for three days and the inconvenience it is causing may be irreparable for some.

One user, for instance, demanded to know why he has been restricted to withdraw his cash, his email posted on Reddit. Bitstamp’s trading services may be down, but a user’s money in his bank account is a different story. The bitcoins compromised may just be a tiny fraction, but the intensity of its effect to users is massive.

The customer then received an email template response instead of a more personal reply, stating that the technical and accounting issues related to his request would be too great of a risk since the website is still restoring all its services as a whole. Unfortunately, Bitstamp didn’t state the exact schedule of its re-launch.

To wait for the company to just do their thing is easier said than done. In fast-paced societies where cryptocurrencies are expected to be spontaneous in all its transactions, this scenario is unacceptable.

However, Bitstamp’s case is not isolated. HashProfit and BetMoose have just experienced the same thing, the latter of which just recovered from a sustained DDos attack on its production server. BetMoose’s hacker goes by the name of DD4BC, which was the same alleged hacker of Bitcoin casino sites like Nitrogen Sports back in July 2014.

The attacker also used the familiar DD4BC Bitcoin extortion trick to BetMoose as it did with Nitrogen Sports. While it asked for 2BTC initially from the latter, it only asked for 1 BTC from the former.

BetMoose claims that the attack has since stopped, but considering that the hacker’s extortion attempts with Nitrogen Sports lasted a few months, it can be hard to say.

Incidents like these happening almost all the same time signify a greater dilemma in the future of Bitcoin as a supposed-to-be safe and secure way to transact on the internet, and it highlights the fact Bitcoin gamblers seek security too. Will the consecutive cases of attacks affect how users see cryptocurrencies as part of a more mainstream usage?