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Bitstamp and Bitcoin Exchange Hacks

We’re comfortable to be in the company of highly educated users and business owners of bitcoin.  It’s a luxury, I admit.  However, as the world is now screaming that Bitstamp got hacked, it’s becoming apparent that several  bitcoin exchanges have been affected.  Not one, but several.  What’s the common link?

As details are now emerging, the payment provider that lets people deposit cash to the bitcoin exchanges, called EgoPay, got hacked. Not the exchange itself. How it worked is that, people deposited fake cash into the exchange (via EgoPay), and then bought bitcoin with it.  The exchange was not compromised, the fiat provider was.  Let it be known, that this is only possible with fiat money.  It’s impossible to make new bitcoins.

As I’ve learned from companies like Mintpal, most hacks are due to human behavior, or fiat problems.  Never bitcoin.  This is the case, once again.  Let me remind everyone:


  1. Keep your funds in an exchange – use a high entropy wallet.
  2. Listen to mainstream sources.

Over and out.

Posted In: bitcoin