Bitstamp Accounts Frozen • Hacker News Board

Re: Bitstamp Accounts Frozen

#61

Post by PhantomGremlin » Mon, Jan 05, 2015, 9:38 AM UTC

zo1 wrote: post #56

PhantomGremlin wrote: post #49

Earlier quoted context omitted.

I think a tweet from a few years ago sums up the situation (at least in terms of "conventional wisdom"): You know what’s cooler than a million dollars? Virtual currency backed by nothing and nobody. @ReformedBroker The only reason BitCoin exists is because of all the problems with existing currencies and payment mechanisms. It solves a lot of those problems, but creates new problems of its own.

>" The only reason BitCoin exists is because of all the problems with existing currencies and payment mechanisms. It solves a lot of those problems, " What problems would that be?

There are all kinds of problems with existing currencies.

Ask a Russian if they're feeling good about the recent fluctuations in the value of the ruble. It's telling that some Russians consider Bitcoin to be more stable than their national currency!

Ask an Argentinian if they're happy with the currency controls their government has imposed on them.[1]:

   –In the U.S., bitcoin payment processors generally
   find merchants want them to immediately convert
   their bitcoins into dollars.

   In Argentina, the exact opposite occurs.
   Firms such as San Francisco-based BitPagos
   will take the dollars received by tourism
   industry clients in Buenos Aires and deliver
   them bitcoins in return.

   That their clients are opting for this says
   much about Argentina’s dysfunctional financial
   system and bitcoin’s potential to provide an
   escape route for citizens of countries with
   strict currency controls.

Those are just two quick examples.

[1] http://blogs.wsj.com/moneybeat/2014/06/25/bitbeat-why-bitcoi...

Re: Bitstamp Accounts Frozen

#62

Post by FatalLogic » Mon, Jan 05, 2015, 9:45 AM UTC

https://Bitstamp.net is now showing this message

Bitstamp Service Temporarily Suspended

We have reason to believe that one of Bitstamp’s operational wallets was compromised on January 4th, 2015.

As a security precaution against compromises Bitstamp only maintains a small fraction of customer bitcoins in online systems. Bitstamp maintains more than enough offline reserves to cover the compromised bitcoins.

IN THE MEANTIME, PLEASE DO NOT MAKE DEPOSITS TO PREVIOUSLY ISSUED BITCOIN DEPOSIT ADDRESSES. THEY CANNOT BE HONORED!

Customer deposits made prior to January 5th, 2015 9:00 UTC are fully covered by Bitstamp’s reserves. Deposits made to newly issued addresses provided after January 5th, 2015 9:00 UTC can be honored.

Bitstamp takes our security and soundness very seriously. In an excess of caution, we are suspending service as we continue to investigate. We will return to service and amend our security measures as appropriate.

Bitstamp Team

Re: Bitstamp Accounts Frozen

#63

Post by abrkn » Mon, Jan 05, 2015, 10:09 AM UTC

> You should STOP SENDING bitcoin deposits to your Bitstamp account IMMEDIATELY as private keys of your deposit address may be lost.

I read this as wallet file(s) having been corrupted. The way to avoid this is to use deterministic[1] wallets

However...

> We have reason to believe that one of Bitstamp’s operational wallets was compromised on January 4th, 2015.

makes it sound like one would be wise to short sell btc immediately.

[1] https://github.com/bitcoin/bips/blob/master/bip-0032.mediawi...

Re: Bitstamp Accounts Frozen

#64

Post by sgt101 » Mon, Jan 05, 2015, 10:17 AM UTC

josephjacks wrote: post #19

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…

Andreessen said on Twitter earlier today that he thinks the BTC price drop is due to inefficient miners selling BTC to fund OPEX and keep operations going. This activity is seen in the hash rate.

I think (NO EVIDENCE!) that people using BTC over Christmas and in the sales is likely to be a factor in driving the price down. Retailers immediately exchange the coins for $$ to avoid the risk of holding them, so this is a substantial liquidity call on the currency.

Re: Bitstamp Accounts Frozen

#65

Post by sgt101 » Mon, Jan 05, 2015, 10:17 AM UTC

josephjacks wrote: post #19

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…

Andreessen said on Twitter earlier today that he thinks the BTC price drop is due to inefficient miners selling BTC to fund OPEX and keep operations going. This activity is seen in the hash rate.

I think (NO EVIDENCE!) that people using BTC over Christmas and in the sales is likely to be a factor in driving the price down. Retailers immediately exchange the coins for $$ to avoid the risk of holding them, so this is a substantial liquidity call on the currency.

Re: Bitstamp Accounts Frozen

#66

Post by bkolobara » Mon, Jan 05, 2015, 10:18 AM UTC

I was also not able to log in for few hours to kraken.com. I would be just informed to try later. I never saw a notification about it. And of course I was not able to cancel my order while the price was dropping.

Every time I try to touch bitcoin I lose money before I even buy them. And when the price starts dropping all the exchanges become a bit shady.

Re: Bitstamp Accounts Frozen

#67

Post by csomar » Mon, Jan 05, 2015, 10:30 AM UTC

zo1 wrote: post #57

nullc wrote: post #43

Earlier quoted context omitted.

::sigh:: This is one of the reasons that Bitcoin core discourages address reuse.

It looks like they use a specific/unique deposit address for each user. Where exactly is the address reuse in this case that you mention?

I think he means you use a new address for each deposit.

Re: Bitstamp Accounts Frozen

#68

Post by miander » Mon, Jan 05, 2015, 10:32 AM UTC

imperialdrive wrote: post #12

https://www.irccloud.com/pastebin/1cvm62al this is all I could find from Twitter search: does the timing match up at all? 11:48 AM protip 11:48 AM and exchange is getting hacked now 11:48 AM GOXXED 11:49 AM an exchange 11:49 AM what 11:49 AM guess which one im goxxing 11:49 AM thats why prices are falling 11:49 AM → dzan joined ⇐ mpm quit 11:50 AM you sound like shovel 11:50 AM hi shovel

Always really important not to jump to conclusions on these things, but I can't help but be curious to know what time zone these time stamps are in. Unfortunately, there doesn't appear to be any way to find out. The http headers for that page also simply report the current time.

Re: Bitstamp Accounts Frozen

#69

Post by megaultra » Mon, Jan 05, 2015, 10:37 AM UTC

qnr wrote: post #3

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."

I don't like the wording here:

The majority of our coins are swept and placed in cold storage often so this shouldn't be a major issue right now.

It leaves too much wiggle room. It's like saying:

At least some coins have not been placed in cold storage so this could be an issue.

Does not look good.

Re: Bitstamp Accounts Frozen

#70

Post by runeks » Mon, Jan 05, 2015, 11:34 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…

> It's very suspicious when a Bitcoin exchange claims problems on the deposit side and stops processing withdrawals.

I believe the problem is the following: if you deposit to a certain, old deposit address, that Bistamp has lost the private key to, the Bitstamp deposit system might credit your account with the bitcoins anyway, even though they are not there, because the private key is lost.

If you then withdraw bitcoins subsequently, you are literally withdrawing someone else's bitcoins, because the bitcoins you deposited never arrived, although the Bitstamp software architecture believes they are there, because the deposit address reflects a deposit -- Bitstamp just doesn't have the private key, so the balance of that address is irrelevant.

That's one meaningful explanation, at least.