Bitcoin bank Flexcoin pulls plug after cyber-robbers nick $610,000
Yet another Bitcoin institution has had its coffers drained by hackers and will be forced to shut down as a result.
Self-termed “Bitcoin bank” Flexcoin has told its customers that the theft of its Bitcoins, valued at $610,000 (£366,000), has driven the company over a cliff. Effective immediately, the site said it will be shutting down and suspending its service.
According to Flexcoin, the digital robbery occurred on March 2 when hackers were able to target and remove 895 BTC stored in the company’s hot wallets. You can track the movement of the swiped crypto-currency from here and here.
“As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately,” the biz said.
It’s worth pointing out that Flexcoin also kept some customers’ BTC in cold wallets, which are stored offline and out of reach of the hot-wallet hackers: the company said funds stored in these cold wallets were not compromised, and can be retrieved through an identity verification process.
Other users, however, are being directed to Flexcoin’s Terms of Service page, which notes that the company (what’s left of it) is not liable for lost Bitcoin.
Touting itself as having solved “nearly every problem that exists with the Bitcoin currency today,” Flexcoin had offered both hot and cold wallet storage as well as processing services for merchants looking to accept Bitcoin transactions. The company had sought to make money by collecting fees from certain transactions, but also offered free Bitcoin-to-Bitcoin transfers.
The shutdown marks the second time in as many weeks a Bitcoin exchange has been forced to shutdown after being raided by attackers.
Following weeks of speculation and protests from users, the MtGox exchange finally conceded to bankruptcy proceedings. That company was found to have left open a known vulnerability in its Bitcoin handling systems that allowed one or more attackers to pilfer roughly 750,000 Bitcoins and leave the site with a $63.8m debt in meatware currency.
Flexcoin said in February that it was not impacted by the MtGox attack. ®
We hold zero coins in other companies, exchanges etc. While the MtGox closure is unfortunate, we at Flexcoin have not lost anything.
— flexcoin (@flexcoin) February 25, 2014