Monday, January 5, 2015

Is the Bitstamp Suspension More Than a Hack Problem?

I am nowhere near an expert on the technical back office structures of Bitcoin exchange operators. But could Bitstamp's suspension of operations reflect a deeper problem than just a hack?

It is curious that the "hack" and suspension was announced as the Bitcoin price was hitting new lows.

Here is a different take on what is going on via CNBC:
"Don't believe Bitstamp. It's a matter of liquidity," Jeffrey Robinson, author "BitCon: The Naked Truth about Bitcoin" wrote to CNBC. "Who's next? It's as if Bitstamp realized they couldn't internalize the risk anymore so just decided, Let's suspend operations until everything settles down."

Others are in agreement that Bitstamp's issues may go well beyond security. A commentary in the Financial Times posited that the issues could lie in the company's financials becoming unhinged by the falling price, or the economics of mining taking their toll on the exchanges.

The price of bitcoin dropped into the $250-range on Sunday after trading for weeks in the mid $300s.

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