Is Bitstamp Safe? (2025 Update)

What is Bitstamp?

Bitstamp is a Luxembourg-based cryptocurrency exchange founded in 2011. The company serves over 4 million customers globally and is one of the oldest operating cryptocurrency exchanges in the world. 

Bitstamp is known for its regulatory compliance, and institutional services. In June 2025, the exchange was acquired by Robinhood for $200 million. 

What security features does Bitstamp have?

Let's walk through some of Bitstamp's security features:

• Cold storage: Bitstamp stores 95% of customer funds offline in cold storage wallets, which protects cryptocurrency from online attacks. 
• Two-factor authentication (2FA): Users can enable SMS, email, or Google Authenticator for account protection. 
• Third-party certified: Bitstamp is audited annually by a Big 4 accounting firm, and holds security certifications like SOC2 Type 2. 
• Backed by Robinhood: Following its acquisition, Bitstamp benefits from Robinhood's infrastructure and regulatory expertise.

Has Bitstamp ever been hacked?

Bitstamp experienced a significant security breach in January 2015. Hackers stole approximately 19,000 bitcoins worth about $5 million at the time, and about 12% of Bitstamp’s total holdings. The attack occurred when a Bitstamp employee unknowingly downloaded malware. 

Bitstamp suspended operations for nearly a week following the hack, moved all remaining funds to new cold storage systems, and fully reimbursed affected customers. The company stated that the stolen funds represented only a small fraction of its total reserves, with the majority held securely in cold storage.

It’s important to note that this event took place more than 10 years ago, and Bitstamp’s security has since improved significantly. 

Is Bitstamp FDIC insured?

Crypto on Bitstamp is not FDIC insured. Generally, cryptocurrency is not subject to FDIC protection.

What legal and regulatory issues has Bitstamp faced?

Bitstamp has maintained relatively clean regulatory standing throughout its history. However, the exchange has faced some operational challenges and regulatory compliance issues. In 2023, Bitstamp delisted several tokens flagged as potential securities by the SEC. 

Is Bitstamp legal in the U.S.?

Yes. Bitstamp is available in most US states except Hawaii and Nevada. 

Why should I use Bitstamp?

Bitstamp is a great choice if you want a well-established exchange with institutional backing from Robinhood and a track record of reliable operations.

What are the risks of using Bitstamp?

Here are the main risks of using Bitstamp:

• Custodial risk: Like all centralized exchanges, crypto held on Bitstamp could be lost if the platform goes bankrupt or is hacked.  Bitstamp's 2015 hack demonstrates that even established exchanges can be compromised. 
• Account-level threats: Your account could be compromised through phishing attacks or malware. 

Protect yourself by enabling two-factor authentication, being vigilant against phishing attempts, and moving long-term crypto holdings to a hardware wallet for additional protection. 

Does Bitstamp report to the IRS?

Bitstamp follows Know Your Customer (KYC) requirements and collects user identification information to comply with regulations. Starting in 2026, crypto exchanges like Bitstamp must issue Form 1099-DA to report capital gains and losses to the IRS.

Remember, you are required to report all taxable income from Bitstamp and other platforms on your tax return. Crypto tax software like CoinLedger can automatically track your Bitstamp trades and generate crypto tax forms in minutes. 

Conclusion

Bitstamp offers strong security features like cold storage and two-factor authentication. While the exchange experienced a hack in 2015, it has maintained clean operations for nearly a decade since and is now backed by Robinhood's institutional infrastructure.