Hacked Bitcoin Exchange Back Up and Running

Jan. 12, 2015

Hacked Bitcoin Exchange Back Up and Running Bitstamp, the Slovenian digital-currency exchange that temporarily halted operations last Monday after a breach resulted in the loss of bitcoins worth nearly $5.5 million, came back online on Friday, the company said in a statement. Bitstamp reiterated that the “overwhelming majority” of bitcoins the company held remain secure in cold storage and all customers’ balances “are completely safe and will be fully honored,” according to CEO Nejc Kodrič. The company opted to stay offline for a few days to rebuild its systems with additional security and assist with possibly apprehending the hackers involved.

“By redeploying our system from a secure backup onto entirely new hardware, we were able to preserve the evidence for a full forensic investigation of the crime,” Kodrič said. “We have also taken this time to implement a number of new security measures and protocols so that customers can resume using Bitstamp with full confidence and trust. While this decision means we have not been able to provide you with services for a number of days, we feel this extra measure of precaution was in the best interest of our customers.”

Kodrič said Bitstamp has become the first exchange to implement more secure multi-signature technology to protect bitcoins it stores. Multisig requires more than one key to complete a transaction. The standard model is to require two out of three keys to spend from a balance – of those keys, one goes to the user, one to the service (exchange or wallet) provider and another to a trusted third party.