Bitstamp issues statement and temporarily suspends service

[crazy_rabbit]

This is conjecture on my part, based on Bitstamp's Twitter statements, such as "Working alongside the team from San Francisco, progress towards redeployment is strong. Huge thank you to for your confidence and patience."

Bitstamp desperately needs a few million dollars right now. Where are they going to get it? They're two unknown guys in their twenties, in Slovenia, with a mail drop in London. Nobody is going to fund that. If they were in Silicon Valley, they might be able to get VC funding. They have a user base; they're fundable. That's probably the motivation for the move to San Francisco.

Whether they can get funding remains unknown. If they'd closed a deal, they would probably announce it. So it's unlikely there's a deal in place.

Well they have already had VC capital investment if I remember correctly, and they won a big European startup award so they are hardly unknown.  It's true though, I don't think they could have earned $5 million in fee's so they probably DO need investment from somewhere.

The theory that by moving to USA they might be able to keep the seized bitcoins is a good one as it indeed could not only buy stamp time but their lawyers could make a very good case in court. It's much better to fight the government in court, and if you lose, end up with a fine that the government would be more than happy to negotiate a pay schedule with you for (The US government isn't in the habit of putting companies out of business with fines) rather fight countless customer lawsuits. So yeah- I could imagine those seized funds going to cover the losses.

Although I suspect they will try their hardest NOT to do that, as it's just kicking the bucket down the road, but if they must- they may.

Personally, for me the promise of a return in 24-48 hours and that promise expiring has an omminous tone to it. :-(

[tiwi]

More days than not running exchange, the greater the losses for them. Most likely they are waiting, when customers come to terms with the idea that they cheated. Total "statements" of their boss does not bear any serious information, do not work with potatoes, they have our money. It's time to start regulating such offices, in the same way as banks and other major office, otherwise suffer many more people. Where can I apply in such cases? Who will protect us from fraud? Who adjusting the activity of these persons at the moment and where? Can not just wait and trust formal replies in Twitter.

[celebreze32]

Forfeiture of balances?

If true...then wow!

Not sure if that is legal anywhere on the planet to just take shit because they didn't get verified in a certain time frame.

From my understanding they sent out various warnings over a ~1 year period about verifying accounts. After the period was up, accounts that were unverified had to give up their identity before any transactions are processed. I guess if you refused to verify and did not withdrawal within the given time, then you would have to verify or lose you balances.

Can anyone estimate how many coins they hold in unverified accounts? Are there any records anywhere? I read a few threads started by people who refused to verify and must have forfeited their coins.

[pawel7777]

Some new details on the story:
http://www.coindesk.com/analysis-bitstamp-hacker-stolen-additional-1-75-million/

Analysis: Bitstamp Hacker Almost Stole Additional $1.75 Million

Bitstamp narrowly avoided losing an additional $1.75m in bitcoin during its recent hack, according to a blockchain analysis by an independent researcher.

In the final hours of a $5.1m heist that took place at the exchange five days ago, the $1.75m in bitcoin was quickly moved to an address thought to be used for cold storage by Bitstamp, analyst Danno Ferrin has found.
...

[eneloop]

A lot of talk about previous profits: If the owners cashed it out in their own pocket (absolute legit), then they would think twice to throw their own money back into the exchange. If they reopen, I expect a cashout run. This will last till their reserves are empty and thats it, bankruptcy.

[pawel7777]

A lot of talk about previous profits: If the owners cashed it out in their own pocket (absolute legit), then they would think twice to throw their own money back into the exchange. If they reopen, I expect a cashout run. This will last till their reserves are empty and thats it, bankruptcy.

Might have happened, but in their first period of trading (up to 31 Oct 2013) they left some $0.8m P&L reserve, they could've paid it out to themselves straight away.

It proves nothing, but may indicate that they've seen importance of holding a reserve.

https://bitcointalk.org/index.php?topic=785256.0

[celebreze32]

They've just updated their whois data to an anonymous whois protector:

Whois Record ( last updated on 2015-01-09 )

Domain Name: BITSTAMP.NET
Registry Domain ID: 1665186950_DOMAIN_NET-VRSN
Registrar WHOIS Server: whois.tucows.com
Registrar URL: http://tucowsdomains.com
Updated Date: 2014-10-01T17:45:23Z
Creation Date: 2011-07-04T12:09:15Z
Registrar Registration Expiration Date: 2024-07-04T12:09:15Z
Registrar: TUCOWS, INC.
Registrar IANA ID: 69
Registrar Abuse Contact Email:
Registrar Abuse Contact Phone: +1.4165350123
Reseller: Domenca d.o.o.
Reseller:
Reseller: +386 4 5835 444
Reseller: http://www.domenca.com
Domain Status: ok
Registry Registrant ID:
Registrant Name: Contact Privacy Inc. Customer 0128129599
Registrant Organization: Contact Privacy Inc. Customer 0128129599
Registrant Street: 96 Mowat Ave
Registrant City: Toronto
Registrant State/Province: ON
Registrant Postal Code: M6K 3M1
Registrant Country: CA
Registrant Phone: +1.4165385457
Registrant Phone Ext:
Registrant Fax:
Registrant Fax Ext:
Registrant Email:
Registry Admin ID:
Admin Name: Contact Privacy Inc. Customer 0128129599

http://whois.domaintools.com/bitstamp.net

No, you misread the date format for the date the domain name registration was last updated. You can see below it's 01 October, not the 10 January. My source is https://who.is/whois/bitstamp.net



The raw data is below

Raw Registrar Data
Domain Name: BITSTAMP.NET
Registry Domain ID: 1665186950_DOMAIN_NET-VRSN
Registrar WHOIS Server: whois.tucows.com
Registrar URL: http://tucowsdomains.com
Updated Date: 2014-10-01T17:45:23Z
Creation Date: 2011-07-04T12:09:15Z
Registrar Registration Expiration Date: 2024-07-04T12:09:15Z
Registrar: TUCOWS, INC.
Registrar IANA ID: 69
Registrar Abuse Contact Email: Email Masking Image@tucows.com
Registrar Abuse Contact Phone: +1.4165350123
Reseller: Domenca d.o.o.
Reseller: Email Masking Image@domenca.com
Reseller: +386 4 5835 444
Reseller: http://www.domenca.com
Domain Status: ok
Registry Registrant ID:
Registrant Name: Contact Privacy Inc. Customer 0128129599
Registrant Organization: Contact Privacy Inc. Customer 0128129599
Registrant Street: 96 Mowat Ave
Registrant City: Toronto
Registrant State/Province: ON
Registrant Postal Code: M6K 3M1
Registrant Country: CA
Registrant Phone: +1.4165385457
Registrant Phone Ext:
Registrant Fax:
Registrant Fax Ext:
Registrant Email: Email Masking Image@contactprivacy.com

[singular]

many people forget that Bitstamp "reserve" it's the client's Bitcoin.

Pretty much this. People forget customer's money is NOT a Bitstamp asset. They have to cover up the losses from their income, which is based on trading fees.

I may add...and not only on trading fees. You cannot make millions from 0.03%. This is like free so they have other source of making money from this biz; maybe the price difference...

Fees are from 0.4 to 1% at bitstamp (buyer and seller pay from 0.2-0.5%), they generate majority of the profits, check volume and you will see, so they can cover loss with that.

let's not forget that they reported a profit of about 800k USD in 2013....

even we double it because Bitstamp may report fake numbers in order to avoid possible taxes....it's 2 mil USD per year net profit roughly.

we can say they need 2 years to recover the loss (IF they will have the same amount of clients; clients who will run away ones the Bitstamp will open the withdrawals).

in the mean time, they have to open their pockets and hoping that everything will be as in 2014.... very hard to believe that,

Dunno what they reported, but calculate by yourself, accounting tricks exists in this world, also they moved business from slovenian company to uk company in 2013

[Poppy]

Some new details on the story:
http://www.coindesk.com/analysis-bitstamp-hacker-stolen-additional-1-75-million/

Analysis: Bitstamp Hacker Almost Stole Additional $1.75 Million

Bitstamp narrowly avoided losing an additional $1.75m in bitcoin during its recent hack, according to a blockchain analysis by an independent researcher.

In the final hours of a $5.1m heist that took place at the exchange five days ago, the $1.75m in bitcoin was quickly moved to an address thought to be used for cold storage by Bitstamp, analyst Danno Ferrin has found.
...

Talk about some serious pay day.

You think a hack like this can happen again? if so, I`m sure on buying bitcoin from bitstamp...

[Quinn]

If bitstamp goes down, the prices will fall so hard on bitcoin.

I hope there were more stronger exchanges..

[dmwardjr]

BITSTAMP IS TRADING NOW