Our take on the Bitfinex incident

The bitcoin exchange, Bitfinex, suffered a security breach on 2 August 2016, resulting in a loss of BTC 119,756 (USD 80 million). We of course hope that this issue will be resolved quickly and with a positive outcome for Bitfinex and its customers.

Users of the Bitstamp exchange, however, can rest assured about the security measures we have in place and that their funds are safe. Bitstamp’s multi-sig implementation system is fundamentally different from that of Bitfinex. Bitstamp uses BitGo exclusively for its hot wallet, where only a small amount of bitcoins are kept (below 2%). The vast majority of our bitcoins are stored off line in cold storage. We were the first to implement hot wallet/cold storage and multi-sig, and we are confident in our system.

Aware that monitoring is crucial in the industry, we are the first virtual currency exchange to get formal oversight in place. A key component of this is our recently acquired licence, which requires regular external financial audits, code reviews and penetration tests, examinations and reporting of our financial balances. This provides the security our users require.

In our view, this unfortunate incident only serves to further confirm the importance of compliance, corporate governance, regulatory monitoring and auditing for virtual currency services.

Bitstamp team