Another major theft of bitcoins is being reported and again a business has to shut down as a result.
This time it’s Flexcoin — which called itself a bitcoin bank. Flexcoin reported the theft of 896 BTC (that’s about $622,000 at current price).
Flexcoin, which provides digital wallet services, is run by Flexcoin Inc. in Edmonton Alberta, Canada.
Flexcoin’s theft illustrates one of the biggest issues with cryptocurrencies — they’re vulnerability to hack attacks.
Flexcoin’s closure follows that of the much larger collapse of Mt. Gox, once the largest bitcoin exchange. Mt. Gox also blamed hackers, who reportedly stole 750,000 bitcoins by exploiting a bitcoin wallet bug known as “transaction malleability”. The Tokyo-based company that runs Mt. Gox, headed by Mark Karpeles, faces mounting class-action lawsuits in the U.S. and U.K., and even scrutiny from U.S. regulators.
However, the Mt. Gox meltdown has not hurt trading in bitcoins, and certainly the Flexcoin shutdown likely won’t either.
Bitcoin Tuesday was trading near $700 on most exchanges, representing an impressive rebound from last week when it was hovering at about $500 in the wake of Mt. Gox’s initial shutdown.
Here is Flexcoin’s statment:
On March 2nd 2014 Flexcoin was attacked and robbed of all coins in the hot wallet. The attacker made off with 896 BTC, dividing them into these two addresses:
As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately.
Users who put their coins into cold storage will be contacted by Flexcoin and asked to verify their identity. Once identified, cold storage coins will be transferred out free of charge. Cold storage coins were held offline and not within reach of the attacker. All other users will be directed to Flexcoin’s “Terms of service” located at “Flexcoin.com/118.html” a document which was agreed on, upon signing up with Flexcoin.
Flexcoin will attempt to work with law enforcement to trace the source of the hack.
Updates will be posted on twitter as soon as they become available.