Major bitcoin exchange suspended after price drop

Bitcoin

Bitstamp suspended operations early Monday, signalling what some are calling a watershed moment for bitcoin.

The U.K.-based exchange said it would be halting withdrawals and dissuaded customers from making deposits following what it implied was a security lapse. Still, some have argued that this could be an excuse for a larger liquidity problem after the weekend's big drop in bitcoin's price.

"We have reason to believe that one of Bitstamp's operational wallets was compromised on January 4th, 2015," the company wrote in a message on its website.

Here's their full message:

Some, however, are not buying this explanation.

"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.

Bitstamp could not immediately be reached by CNBC for comment.

No matter what the cause of the service halt, Monday's news will be of key importance for the future of the cryptocurrency, according to "Fast Money" trader Brian Kelly.

"This is a critical moment for Bitcoin. As Adam Smith said, 'all money is a matter of confidence' and the reaction to this potential hack will either serve to undermine or bolster confidence," he wrote.

While Mt. Gox, the bitcoin exchange that fell apart in 2014, may have seen mismanagement, Bitstamp has a "highly capable venture capital team," according to Kelly.

In a statement to Coindesk, Bitstamp wrote: "Bitstamp takes our security and soundness very seriously. In an excess of caution, we are suspending service as we continue to investigate. We will return to service and amend our security measures as appropriate."

Here's what Bitstamp CEO Nejc Kodrič had to say over Twitter:

Cold storage basically means that the wallet numbers have been recorded off of a hackable server (anything from being written on a piece of paper to stored on a USB drive).

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