Bitstamp Offers No-Fee Trading After $5 Million Theft

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Last updated on October 18th, 2017 at 04:46 pm

Bitcoin exchange Bitstamp has resumed service after being shut down to investigate a theft. It announced that it would not charge any fees on trades that take place prior to January 18th.

On January 4th, a number of the exchange’s hot wallets were broken into by an unknown attacker. This resulted in the loss of almost 19,000 BTC (worth about $5 million). According to the exchange, this represented only a small fraction of its total funds. The majority of the exchange’s funds are stored in offline wallets and were not compromised. Customers were reassured that they would not lose any money from their accounts as a result of the theft.

A day later, all trading was temporarily ceased on the website in order to investigate the cause of the issue. In a blog post, chief executive officer Nejc Kodrič explained that the servers were fully backed up so to preserve evidence that could be used to trace the attacker.

Kodrič said that the company has introduced a number of new security measures that would help to prevent similar events from occurring in the future. Bitstamp now supports the Bitgo wallet which uses multiple keys to unlock. Two keys are held by the customer, while one is held by Bitgo. Any two keys are required to access the funds held in a wallet. This means that one key can be held by a third party without them being able to create transactions.

Bitstamp also took advantage of the downtime to revamp their backend. The website is now running on new servers that have a secure backup of the exchange’s code and customer information. The website’s hosting is now provided by Amazon Web Services (AWS), a cloud computing platform that is used by many of the largest websites in the world including Pinterest, Netflix, and Reddit.

Coinbuzz

CoinBuzz provides news and analysis on Bitcoin and other digital currencies. Founded in 2014, the site has quickly become a leading source of information on digital currency technologies, businesses, markets, and regulation.
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