Bitcoin News in Review: Bitstamp Breach, GAW Drama, Bitcoin Price, and More

January 12, 2015 00:57 UTC

Happy Sunday, and welcome back to another Bitcoin News in Review, where we feature some of the top stories of the week here on CryptoCoins News. This week, Bitstamp was hacked, resulting in the loss of nearly 19,000 bitcoins, Josh Garza of GAW Miners and PayCoin challenged the Litecoin Association director to a public debate, the bitcoin price continued to fall, and more. Keep scrolling for this week’s top stories.

Bitstamp Temporarily Goes Offline Due to Wallet Breach

Early this week, popular bitcoin exchange Bitstamp halted withdrawals and deposits due to a wallet breach. The exchange lost nearly 19,000 bitcoins, about 12% of all its reserves. Many bitcoiners quickly started comparing Bitstamp to Mt Gox, and feared for the worst. However, Bitstamp quickly confirmed the coin loss, and assured users that the exchange would be back online soon. Bitstamp didn’t exactly relaunch in the given timeframe, but the exchange is now back online with multi-sig security. Bitstamp offered the following statement explaining the long hiatus:

We took the decision to rebuild our systems from the ground up from a secure backup for a few reasons. By redeploying our system from a secure backup onto entirely new hardware, we were able to preserve the evidence for a full forensic investigation of the crime. We have also taken this time to implement a number of new security measures and protocols so that customers can resume using Bitstamp with full confidence and trust. While this decision means we have not been able to provide you with services for a number of days, we feel this extra measure of precaution was in the best interest of our customers.

Josh Garza Challenges Litecoin Association Director to Public Debate

This week continues the PayCoin/GAW Miners controversy. GAW’s CEO Josh Garza has challenged Litecoin Association director Andrew Vegetabile to a public debate in response to Litecoin asking to be delisted from Coin-Swap. Coin-Swap is a cryptocurrency exchange that was recently acquired by GAW Miners. After hearing about the transfer of ownership, Andrew quickly asked for Litecoin to be delisted due to ethical concerns about association with GAW Miners. While Coin-Swap did delist Litecoin, Garza responded with an emotional appeal, stating:

“The worst part is this: look how this looks to those who are outside our industry,” he said. “Instead of a thriving, diverse set of philosophies, currencies and technologies, they constantly see bickering and bashing on top of the bad news of Silk Road takedowns and scam companies. It is disappointing to see it take us backwards. We need to be working together even if we don’t agree. It is wrong, and it is sad.”

I challenge Andrew to an open public debate in person online any time to discuss how this kind of action is bad for our industry and all the coins out there. If he asked the Litecoin community as a whole and had a vote, would the Litecoin users want a new place to use their coins and support their choice of currency? I think yes, they would.”

For those who haven’t kept up with the GAW controversy, PayCoin is an altcoin created and marketed by GAW Miners that was supposed to have a $20 price floor among other things. Yet despite the company’s promises, the price fell below $20, and GAW was accused by some of running a scam. Josh Garza plans to address the community’s concerns at The North American Bitcoin Conference in Miami, and has revealed a direct response to the $20 Paycoin price floor.

Bitcoin Price

At the time of this writing, one bitcoin is worth ~$267 USD, continuing the downwards price trend of recent weeks. CCN’s latest price analysis suggests that the price may continue to decline in the coming weeks, perhaps reaching as low as $200. What do you think? Will you buy some BTC now that the price is low? Or will you be selling?

How to Launder Stolen Bitcoins

This week, someone stole nearly 19,000 bitcoins (~$5 million) from bitcoin exchange Bitstamp. However, what if the hacker wants to spend the stolen coins? Every single bitcoin transaction is publicly recorded on the blockchain. This means that any transaction he/she makes can be traced. What’s the point of stealing so many coins if you can’t even use them? Well, it turns out there are several ways to launder stolen bitcoins.

Note: CCN does not endorse stealing or money laundering. This article is provided purely for educational purposes. Furthermore, the same techniques used to launder bitcoins can be used to give yourself more privacy with your LEGITIMATELY obtained bitcoins as financial privacy is not a crime.


That’s all for this week. To stay up to date with the latest cryptocurrency news, be sure to follow us on Twitter.

Last modified: January 12, 2015 10:17 UTC

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I enjoy keeping up with the latest stuff in science and technology and have been following Bitcoin for a few years now. I also occasionally post cool stuff on twitter.