Bitstamp Accounts Frozen

#1

Post by TwoFactor » Mon, Jan 05, 2015, 5:21 AM UTC

All customers should have received the following email. For some reason its not posted on their website.

-----

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

Re: Bitstamp Accounts Frozen

#2

Post by sidko » Mon, Jan 05, 2015, 5:59 AM UTC

Here's a verification with the mail headers:

http://www.reddit.com/r/Bitcoin/comments/2rdbgf/bitstamp_hot...

Also, couple of more Reddit threads with an ongoing discussion around this:

http://www.reddit.com/r/Bitcoin/comments/2rd6bb/problems_wit...

http://www.reddit.com/r/Bitcoin/comments/2rd2xe/bitstamp_is_...

Re: Bitstamp Accounts Frozen

#3

Post by qnr » Mon, Jan 05, 2015, 6:07 AM UTC

More info: https://coinfire.cf/2015/01/05/bitstamp-confirms-deposit-add...

"We are working to determine what has gone wrong. The majority of our coins are swept and placed in cold storage often so this shouldn’t be a major issue right now but we are still working to determine the breadth of the issue. This seems to be a server issue and not a compromise but our teams are still investigating."

Re: Bitstamp Accounts Frozen

#4

Post by Animats » Mon, Jan 05, 2015, 6:33 AM UTC

This is strange. There's still nothing about this on their web site.

It's very suspicious when a Bitcoin exchange claims problems on the deposit side and stops processing withdrawals. Nobody trusts a Bitcoin exchange in trouble, with good reason given the history. On the other hand, it's 6:30 AM in London, where Bitstamp is, and their staff is probably not in yet. Bitstamp is still processing trades; they haven't shut down their trading engine.

Most merchants who accept Bitcoin do so through Coinbase, which sells on Bitstamp. Coinbase only holds a working float of Bitcoins. When Coinbase can't unload incoming Bitcoins, they start refusing transactions. So most Bitcoin e-commerce will stop within hours if this isn't fixed rapidly.

On top of that, Bitcoin, after being stable around $315-$320 or so for weeks, suddenly dropped to a low of $255 in the last 48 hours. Right now, it's around $270. Something is going on.

Re: Bitstamp Accounts Frozen

#5

Post by [deleted] » Mon, Jan 05, 2015, 6:35 AM UTC

Animats wrote: post #4

This is strange. There's still nothing about this on their web site. It's very suspicious when a Bitcoin exchange claims problems on the deposit side and stops processing withdrawals . Nobody trusts a Bitcoin exchange in trouble, with good reason given the history. On the other hand, it's 6:30 AM in London, where Bitstamp is, and their staff is probably not in yet. Bitstamp is still processing trades; they haven't sh…

[deleted]

Re: Bitstamp Accounts Frozen

#6

Post by jasonjei » Mon, Jan 05, 2015, 6:36 AM UTC

Until there is a bank that can credibly hold onto BitCoin deposits, these sorts of things are going to hinder further the viability and credibility of BitCoin as a mechanism of transaction (Mt Gox seems to have done a ton of damage). As of right now, it seems it's very hard for BTC to be stored safely at a stable price, and keeping your money in a world currency seems like a better investment, for now. I know my sentiments are going to be unpopular with some BTC champions, but as an observer with no BTC, I am wary of using BTC. Just my .02 BTC.

Re: Bitstamp Accounts Frozen

#7

Post by waterlesscloud » Mon, Jan 05, 2015, 6:36 AM UTC

Animats wrote: post #4

This is strange. There's still nothing about this on their web site. It's very suspicious when a Bitcoin exchange claims problems on the deposit side and stops processing withdrawals . Nobody trusts a Bitcoin exchange in trouble, with good reason given the history. On the other hand, it's 6:30 AM in London, where Bitstamp is, and their staff is probably not in yet. Bitstamp is still processing trades; they haven't sh…

If their hot wallet is out of commission, they have nowhere to send withdrawals from, so it makes sense from that angle.

They're definitely communicating poorly, though.

Re: Bitstamp Accounts Frozen

#8

Post by grovulent » Mon, Jan 05, 2015, 6:38 AM UTC

Animats wrote: post #4

This is strange. There's still nothing about this on their web site. It's very suspicious when a Bitcoin exchange claims problems on the deposit side and stops processing withdrawals . Nobody trusts a Bitcoin exchange in trouble, with good reason given the history. On the other hand, it's 6:30 AM in London, where Bitstamp is, and their staff is probably not in yet. Bitstamp is still processing trades; they haven't sh…

This is obviously bad - and certainly suspicious... but the lack of withdrawals given the situation is just sensible.

Withdrawals will require movement from cold storage - am I right? Well - if you've got a security problem with your hot wallet, then this would be a ridiculously stupid thing to enable.

Re: Bitstamp Accounts Frozen

#9

Post by FatalLogic » Mon, Jan 05, 2015, 6:45 AM UTC

Animats wrote: post #4

This is strange. There's still nothing about this on their web site. It's very suspicious when a Bitcoin exchange claims problems on the deposit side and stops processing withdrawals . Nobody trusts a Bitcoin exchange in trouble, with good reason given the history. On the other hand, it's 6:30 AM in London, where Bitstamp is, and their staff is probably not in yet. Bitstamp is still processing trades; they haven't sh…

Most merchants who accept Bitcoin do so through Coinbase, which sells on Bitstamp. Coinbase only holds a working float of Bitcoins. When Coinbase can't unload incoming Bitcoins, they start refusing transactions. So most Bitcoin e-commerce will stop within hours if this isn't fixed rapidly.

Most? Source? Bitpay seems to be bigger than Coinbase

And wouldn't Coinbase just sell somewhere else, instead of shutting down their entire business?

Your claim that most Bitcoin e-commerce will stop within hours seems implausible

Re: Bitstamp Accounts Frozen

#10

Post by moe » Mon, Jan 05, 2015, 6:49 AM UTC

jasonjei wrote: post #6

Until there is a bank that can credibly hold onto BitCoin deposits, these sorts of things are going to hinder further the viability and credibility of BitCoin as a mechanism of transaction (Mt Gox seems to have done a ton of damage). As of right now, it seems it's very hard for BTC to be stored safely at a stable price, and keeping your money in a world currency seems like a better investment, for now. I know my sent…

Since you appear to be struggling with the basic concept of bitcoin, here's the first phrase from Bitcoin.org for you:

    Bitcoin uses peer-to-peer technology
    to operate with no central authority or banks