They say this is only a small fraction of their Bitcoin holdings:

"This breach represents a small fraction of Bitstamp’s total bitcoin reserves, the overwhelming majority of which are held in secure offline cold storage systems."

They should repay. Given the clean record of the exchange until now, I would be tend to believe that they'll pay all lost BTC of their customers from their own pocket. After all, they must have earned a lot more from their operational profits until now.

Or at least that's what they should do.

First of all: 19k cannot be 5% of "their assets" - customers deposits ARE NOT Bitstamp's assets, they cannot use customers money to cover the hole (Gox anyone?).

Taking into account Bitstamp's average commission and volume, 19k is the income they would generate in 8/12 months - the commissions are basically the money with which they can operate, those are "their assets" and NOT customers money.

For a company to lose one full year of income is indeed catastrophic in my book. I know by heart my company would have to file for bankruptcy almost immediately . Unless they were very wise with their money management (I really hope they were), saving a lot of BTC back in the day, etc. they will have a very rough year ahead.

Let's hope that they are a healthy company and that Pantera and/or other investors are willing to help them out.

Bitfinex? Honestly, I did quite a lot of trading back in the early to mid 2013, but I stopped as soon as Gox showed the first signs of insolvency (April/May 2013) and then I used Bitstamp just to cash out a bit in December 2013, but I never had any balance for more than 24 hours on it.

I'd say that there is no "super-safe" exchange for bitcoin. Not controlling directly your private keys is inherently risky. Do not have on any exchange more than you can afford to lose. Sad but true.

They just had 3.100BTC in the hot wallet at the moment of the hack. But they did not realize they were hacked until 24 hours after the hack. Check the transactions. During that 24 hours the hacker kept stealing all the money that was deposited on bitstamp.

This is what the transaction history tells us:

- the first transaction is the bigger one: 3.100 BTC. Probably all that was on Bitstamp's hot wallet at that time.
- after that, the hacker sweeps every coin that is deposited on Bitstamp during 24 hours.
- after a full day, he managed to steal almost 19k.
- after Bitstamp realizes is hacked, transactions slow down, but we still see some transactions going in to the hacker address. This is probably people that did not realize Bitstamp was hacked, so they are still depositing BTC from their clients address book. It could also be some ATM or automated service - anyhow after the announcement only peanuts coming in.

An alternative theory to the above:

I am not sure what bistamp realised and when but regular withdrawals were blocked quite soon after things started.  I.e. I submitted a withdrawal request only a couple of hours after the first hack transaction.  It was about 4-5am UTC on 4 Jan.  That withdrawal remained pending until that evening and was never processed.  Usually it's quite quick to process.

So something stopped allowing withdrawals soon after the hack started.  Unfortunately the thief was able to continue taking funds because he was presumably using some other vector that did not need the regular withdrawal.  E.g. he had control of the private keys.  He was (and is?) able to continue taking funds if he had private keys.

My theory is that some automated control system picked up mismatch with what balances should be vs what they actually had and stopped withdrawals.  Bitstamp management then at some point figured out what was happening.   The hacker is however not blocked by this as he is using another vector (e.g. control of the keys).

My suggestion to improve this would be that the automated control system that picked up the error should on mismatch of balances automatically transfer all at risk funds to cold storage (and continue to do so).  Not sure if this occured, but this might be what the thief was trying to prevent with his high fees.  Was their any attempted double spends on the affected addresses?

Yeah of course.  I assumed that the hacker didn't have control of the full hot wallet.  But if he did then that could be the simplest explanation...

I guess I'm hoping they had a control system, that checked for mismatched balances (or unauthorised tx on their wallets).  And locked down withdrawals in case of an issue.  It should also move funds to safe cold storage. 

Solid analysis of the hack, Rampion.

The 'warm wallet' architecture outlined here should be a way to decrease the likelihood of this type of attack (assuming it played out as described above).

Call me an optonist, but theyv been upfront with it and im sure they can cover it from their reserves.

I wish their deposited coins get locked at Bitstamp.