Update: Bitstamp has confirmed that the service was hacked and fraudsters made off with 19,000 bitcoins, representing roughly $5 million at current value. It's not yet clear who was responsible for the theft or how it happened. CEO Nejc Kodrič says the bulk of their bitcoins are kept safely in cold storage and his company will assume liability for the stolen ones.

Original story below.

Mt. Gox was the largest Bitcoin exchanges in the world when it abruptly went offline nearly a year ago. Now, the cycle seems to be repeating itself as yet another major exchange has been taken offline to investigate a potential security breach.

Bitstamp, the UK- and Slovenia-based Bitcoin exchange billed by many as the most reliable of the bunch, suspended operations early Monday. A message on the exchange’s website notes the company has reason to believe that one of their operational wallets was compromised on January 4.

The good news, at least at this point, is that this doesn’t appear to be a major catastrophe like the Mt. Gox incident as Bitstamp only keeps a small fraction of its customers’ Bitcoins in online systems. The large majority of their Bitcoins – and more than enough to cover the compromised cryptocurrency – are kept offline in “cold” storage.

biggest bitcoin exchanges dark hacked bitcoin virtual currency bitcoin exchange cryptocurrency mt gox hackers hack bitstamp

As such, deposits made prior to January 5 at 9:00 UTC are fully covered by Bitstamp’s reserves.

Bitstamp said they will extend the service outage in an excess of caution as they continue to investigate the incident and will return to service and amend their security measures as deemed appropriate.

Even with Bitstamp’s reassurance, the news is no doubt concerning – especially for those that went through / lost funds in the Mt. Gox debacle. Japanese police now believe that 99 percent of the Bitcoins that disappeared from that exchange were due to internal system manipulation. Or in other words, it was an inside job.