Bitstamp will easily recover from this hack

[rugrats]

5 million dollars is a huge amount to cover out of pocket unless they were making insane amounts of yearly revenue off fees.

You have a point, but Stamp's financial health looks okay as of the last published auditing cycle: http://companycheck.co.uk/company/08157033/BITSTAMP-LIMITED/company-summary

[1715103350]

1715103350

[flipstyle]

5 million dollars is a huge amount to cover out of pocket unless they were making insane amounts of yearly revenue off fees.

You have a point, but Stamp's financial health looks okay as of the last published auditing cycle: http://companycheck.co.uk/company/08157033/BITSTAMP-LIMITED/company-summary

That's quite impressive, but I'm guessing those total figures are mostly comprised by the sum of the customer coins held.  I'd be interested to know their actual revenue figures from the past 2 years after employee/server/maintenance costs.

The question is...do they really have the integrity to stick with this and be willing to work basically free of charge and at a personal cost loss for the next few months, if not years...just to pay back the stolen funds?  My gut tells me no...which is why this scenario almost always plays out the same way. Whether or not this was an inside job, from a logical perspective there are very few business owners that would be willing to take that kind of hit, especially knowing it's already a sinking ship.

It's like people with burried with outrageous personal debts with a meager job salary.  That's why filing for bankruptcy is such a common practice nowadays especially in the current financial climate.

[ChuckBuck]

I don't know if Bitstamp will easily recover from this hack, not actually the right word to use.

It will take some time, to repair the customers trust, basically operating at a loss trying to cover the theft, and hopefully sustain long enough to regain liquidity over time.

Step 1 is reopening and making sure customers wallets are secured.  Everything after that is gravy, including worst case filing for bankruptsy.

[mayax]

5 million dollars is a huge amount to cover out of pocket unless they were making insane amounts of yearly revenue off fees.

You have a point, but Stamp's financial health looks okay as of the last published auditing cycle: http://companycheck.co.uk/company/08157033/BITSTAMP-LIMITED/company-summary

That's quite impressive, but I'm guessing those total figures are mostly comprised by the sum of the customer coins held.  I'd be interested to know their actual revenue figures from the past 2 years after employee/server/maintenance costs.

The question is...do they really have the integrity to stick with this and be willing to work basically free of charge and at a personal cost loss for the next few months, if not years...just to pay back the stolen funds?  My gut tells me no...which is why this scenario almost always plays out the same way. Whether or not this was an inside job, from a logical perspective there are very few business owners that would be willing to take that kind of hit, especially knowing it's already a sinking ship.

It's like people with burried with outrageous personal debts with a meager job salary.  That's why filing for bankruptcy is such a common practice nowadays especially in the current financial climate.

According to the Bitstamp financial statement, the 2013 profit was around of 800,000 USD. Even they hide all the figures, let's say 2 mil usd profit/year. It's too less to cover the loss.
5 MIL USD are a lot of money. 500K are a lot of money but 5 MIL is huge

Bistamp will drag down Ripple with them. Take the popcorn and look to the show that it will come soon.

[CoinCidental]

They may be big but not big enough to recover from a 5.2 million loss (if it was a real hack )

customer trust will be non-existant after this so even if they worked for free
for the next few years (which they probably wont or cant )  the fees would be so low it would take forever to recover this loss

(if they cant protect their own coins/money  ,im not trusting them to protect mine etc  )

communication has been pretty bad apart from the odd tweet telling people not to worry when we need a bit more than that
they wont even comment on the exact total of coins in storage etc

far easier to claim bankrupt ,blame the hacker and retire with the loot (if they have it )

 or open again under a different name and start again fresh and free from debts and obligations

[tokeweed]

5 million dollars is a huge amount to cover out of pocket unless they were making insane amounts of yearly revenue off fees.

You have a point, but Stamp's financial health looks okay as of the last published auditing cycle: http://companycheck.co.uk/company/08157033/BITSTAMP-LIMITED/company-summary

That's quite impressive, but I'm guessing those total figures are mostly comprised by the sum of the customer coins held.  I'd be interested to know their actual revenue figures from the past 2 years after employee/server/maintenance costs.

The question is...do they really have the integrity to stick with this and be willing to work basically free of charge and at a personal cost loss for the next few months, if not years...just to pay back the stolen funds?  My gut tells me no...which is why this scenario almost always plays out the same way. Whether or not this was an inside job, from a logical perspective there are very few business owners that would be willing to take that kind of hit, especially knowing it's already a sinking ship.

It's like people with burried with outrageous personal debts with a meager job salary.  That's why filing for bankruptcy is such a common practice nowadays especially in the current financial climate.

According to the Bitstamp financial statement, the 2013 profit was around of 800,000 USD. Even they hide all the figures, let's say 2 mil usd profit/year. It's too less to cover the loss.
5 MIL USD are a lot of money. 500K are a lot of money but 5 MIL is huge

Bistamp will drag down Ripple with them. Take the popcorn and look to the show that it will come soon.

you mean ripple the platform...?  nope, that will never happen.  bitstamp is just a gateway as far as the ripple network is concerned.  the price of XRP could go down tho, that i give you.

[Daniel91]

They may be big but not big enough to recover from a 5.2 million loss (if it was a real hack )

customer trust will be non-existant after this so even if they worked for free
for the next few years (which they probably wont or cant )  the fees would be so low it would take forever to recover this loss

(if they cant protect their own coins/money  ,im not trusting them to protect mine etc  )

communication has been pretty bad apart from the odd tweet telling people not to worry when we need a bit more than that
they wont even comment on the exact total of coins in storage etc

far easier to claim bankrupt ,blame the hacker and retire with the loot (if they have it )

 or open again under a different name and start again fresh and free from debts and obligations

I agree with you.
They lost their credibility in the bitcoin world and credibility is everything in money business!
They may have no other choice but to start again, under new name or as completely different company.

[johnyj]

If bitcoin price goes down, they will easily recover the loss in a couple of months, however if the price keeps going up, then they would need to operate in fractional reserve mode for a very long time

[dmugetsu]

Yes they're

Look at price of bitcoin now

[spazzdla]

If there is a bank run on stamp they might not..  IMO the longer they wait to open the more intense the run will be.

[CoinCidental]

If bitcoin price goes down, they will easily recover the loss in a couple of months, however if the price keeps going up, then they would need to operate in fractional reserve mode for a very long time

who will ever  agree to put their btc in a fractional reserve system ??
especially one thats already been negligent enough to be hacked for millions of dollars worth

i want my btc instantly when i press the withdraw button or at least know its available when i want it back
and not involved in some fractional system  that doesnt even have enough balance to break even ...............

short off a miracle ,i think the writing is on the wall for bitstamp ,even if they repaid everyone ,the trust is gone .......

[okae]

well i dont know if this will be the end of Bitstamp but for sure, if they want to come back, will be hard for them, just ask yourselft if they be able to survive a withdraw run after they open, hard, this will be hard for them.

Some people compare what happend to them with polo, but never forget that is a different situation, who know how is going on with bitstamp? why do you think they will recover as polo did? im not sure about that... different companys, different situations...

Btw about his "hack" i really think this was a internal job, same as mtgox, but is only a feeling

[mayax]

5 million dollars is a huge amount to cover out of pocket unless they were making insane amounts of yearly revenue off fees.

You have a point, but Stamp's financial health looks okay as of the last published auditing cycle: http://companycheck.co.uk/company/08157033/BITSTAMP-LIMITED/company-summary

That's quite impressive, but I'm guessing those total figures are mostly comprised by the sum of the customer coins held.  I'd be interested to know their actual revenue figures from the past 2 years after employee/server/maintenance costs.

The question is...do they really have the integrity to stick with this and be willing to work basically free of charge and at a personal cost loss for the next few months, if not years...just to pay back the stolen funds?  My gut tells me no...which is why this scenario almost always plays out the same way. Whether or not this was an inside job, from a logical perspective there are very few business owners that would be willing to take that kind of hit, especially knowing it's already a sinking ship.

It's like people with burried with outrageous personal debts with a meager job salary.  That's why filing for bankruptcy is such a common practice nowadays especially in the current financial climate.

According to the Bitstamp financial statement, the 2013 profit was around of 800,000 USD. Even they hide all the figures, let's say 2 mil usd profit/year. It's too less to cover the loss.
5 MIL USD are a lot of money. 500K are a lot of money but 5 MIL is huge

Bistamp will drag down Ripple with them. Take the popcorn and look to the show that it will come soon.

you mean ripple the platform...?  nope, that will never happen.  bitstamp is just a gateway as far as the ripple network is concerned.  the price of XRP could go down tho, that i give you.

Bitstamp is related-interconnected with Ripple;same gang. One of the Bitstamp's directors (Morehead) is owning Ripple.

[clownius]

i want my btc instantly when i press the withdraw button or at least know its available when i want it back

This is part of the problem for exchanges.  People want their money instantly when they hit withdraw.  Meaning they need large sums in their hot wallet.  Its generally the hot wallet that gets hacked.

Vicious circle as traders will flock to the most insecure exchanges who have large hot wallets and when said exchanges get hacked the damage is much greater

[BitAddict]

If there is a bank run on stamp they might not..  IMO the longer they wait to open the more intense the run will be.

I would rather expect a wallet run as the coins are the most vunerable when kept on an exchange, not fiat.

In the short term I agree with you. But in the mid term less fiat will arrive, new customers will be scary to deposit there. So, it will hurt bitcoin price slowly.

[smoothie]

A lot of people are saying that this is the end of Bitstamp. That they've been goxed and that any bitcoins held on the site are now gone. This isn't true. Bitstamp WILL easily recover from this hack. It sucks that this happened, but this isn't really a huge disaster and it should by no means affect the survivability of the company.

On the 5th of January, Bitstamp lost 18,000 BTC from a 200,000 BTC reserve. That's about 9% of the total reserve.

Percentage-wise, this is very similar to the hack that Poloniex suffered in 2014. It lost 12% of its bitcoins due to a technical glitch which was exploited by a hacker. That exchange was able to recover its reserves in just mere months. It has enjoyed a spotless security record since then.

In August 2014, Bter also lost 50 million NXT worth about $1.6 million due to a hacker. After a while, they were eventually able to recover 42 million NXT making their net loss 8 million NXT and a couple hundred BTC which they sold to the hacker for bargain prices in exchange for the return of the bulk of the stolen NXT. Today, they're still operating perfectly fine.

Bitstamp has had $10 million injected into it from venture capitalist/hedge fund firm Pantera. So as a last resort, they could use this money to refund its customers. Bitstamp earns millions of dollars every year from trading fees. The majority of their coins are held in cold storage. Mike Hearn, a trusted Bitcoin dev audited their BTC reserves several months ago and confirmed that everything looked OK. The fact that only 9 percent of all funds were stolen means that the security benefits of separating hot and cold wallets is working. Services like MyBitcoin, inputs.io, and Mt. Gox that failed to properly separate the two have seen the majority of their funds disappear. From the look of this hacking incident, it is clear that Bitstamp is not making the same mistake.

TL:DR; Your deposits are safe. There is no need to worry.

Bitstamp will easily recover from this hack

easily? Nope. Looks like more delays and excuses. 

[gog1]

18000 BTC is not chump change - how many days of trading it takes to recover the loss?

Secondly, people will lose confidence and go to other exchanges and their market share isn't that big to begin with.

Other than doing something very drastic like no fee or 0.05% fee, I see them be relegated into irrelevance.

[testerman]

the problem is not the recovery

the problem is the security breach..

[smoothie]

the problem is not the recovery

the problem is the security breach..

how so?

recovery is being able to have enough funds to cover a $5million loss.

[smoothie]

If bitcoin price goes down, they will easily recover the loss in a couple of months, however if the price keeps going up, then they would need to operate in fractional reserve mode for a very long time

Assuming they have a large fiat amount stashed somewhere to buy cheap coins and people are willing to sell really low?

Maybe....but unlikely.

I still ask why they can't verify how much bitcoin's they have in their possession.

The signed message should not take more than a few minutes to generate for the wallet/addresses they own.

No excuse.