Bitcoins Price Unfazed After Bitstamp Exchange Reports Breach

Bitcoin, which tumbled last year after an exchange that traded the virtual currency lost its holdings and collapsed, held up today after another market, Bitstamp, suspended trading because of a breach.

Prices for bitcoins rose 4 percent to almost $284 as of 4:45 p.m. in New York, according to the CoinDesk Bitcoin Price Index, which represents an average of bitcoin prices across leading global exchanges. That compares with an average daily move of about 3 percent during the previous 30 days.

Bitstamp, an online platform in Europe, said on its website today that its temporarily suspending services after losing fewer than 19,000 bitcoins in a breach of electronic wallets used for operations. The loss amounts to a small fraction of the platforms reserves, and bitcoins held by customers before yesterdays suspension are completely safe and will be honored in full, it said.

Bitcoin prices plunged by more than half last year amid cyber thefts, mounting competition and moves by governments to head off its potential use in criminal transactions. While Bitstamp is among several key exchanges, its dwarfed by bigger platforms, accounting for about 5 percent of dollar transactions in the past 30 days, according to Bitcoin Charts, which tracks the virtual currency.

Mt.Gox, once the worlds largest exchange for digital-currency transactions, went offline in Tokyo in February after losing 850,000 bitcoins, then valued at about $473 million. The company later found 200,000 in an old-format digital wallet.

To contact the reporter on this story: David Scheer in Seattle at dscheer@bloomberg.net

To contact the editors responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net; Pui-Wing Tam at ptam13@bloomberg.net Reed Stevenson, David Scheer

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Bitcoins Price Unfazed After Bitstamp Exchange Reports Breach