Bitstamp exchange hacked

On the 4th of January, 2015, the second largest bitcoin exchange, Bitstamp was suspended after releasing a notice that approximately $5.2 million (19,000 BTC) was stolen by hackers. Bitstamp’s share price took a steep dive with the announcement and has since ceased trading.
Bitstamp Share image
Details around who the hackers were and how the hack took place are still a mystery, as no information around the event has been published. What is known is that unlike the major hack of 2013, where Mt. Gox exchange lost close to $450 million in funds, causing Bitcoins to plummet in value by half, Bitstamp had their reserve funds in cold storage separated from the Internet. Hence, why only $5 million was lost from its hot wallet whilst its remaining majority of worth (estimated $100 million) was safe.

What is interesting is that Bitcoin was once seen as an unstable virtual currency used by criminals, but is now becoming increasingly mainstream, with the likes of Microsoft accepting Bitcoins on Xbox and Windows. Many people may be unaware that the US currency that was once backed by Gold, is a fiat currency backed only by regulations and law. So if there are enough people backing Bitcoin to provide it a ‘value’, it is not too dissimilar to the ‘value’ derived from the US currency or Australian currency for that matter, although currently more volatile.

So an obvious trend we can expect to see with Bitcoins continued success, are more of these Bitcoin thefts to continue into the future, just as we have seen an increase in thefts on the Internet of any currency found around the globe.
So what can be learnt from all this?

  • Cyber-attacks are real and do adversely impact a company’s brand and share price, in addition to costing millions to clean up – check out the Sony Picture hack as an example.
  • These attacks are on the rise as the popularity of Bitcoin increases.
  • Companies that are prepared with security tactics, such as a segregation of the network are impacted far less than those who do not mitigate risk through a security framework.]

So if you’re interested in discussing mitigating security controls to protect your company, as well as strategic security frameworks that are specifically designed with current real-world threats in mind, then please reach out to Jordan Del-Grande, NTT ICT’s Chief Information Security Officer (CISO) for a consultation.

Added 12 January 2015

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