Menu
Bitcoin bank Flexcoin shuts down after massive theft

Bitcoin bank Flexcoin shuts down after massive theft

Some $600,000 worth of bitcoins were stolen from the site

Flexcoin, a site that described itself as the "world's first bitcoin bank," has closed after it got hacked and all of the bitcoins it had placed in online storage were stolen, the site recently announced.

Flexcoin was attacked and robbed March 2 of all coins in its "hot wallet" -- a term that refers to bitcoin online storage -- the site said in an announcement posted to its home page. The attacker made off with 896 bitcoins, which at current prices across several exchanges would amount to roughly US$600,000.

Flexcoin also said it will return to their owners the bitcoins it had put in "cold storage," which weren't stolen because they're held offline.

The company will shut down immediately because it does not have the resources or assets to recuperate from the loss, it said. Flexcoin will work with law enforcement to determine the origins of the attack.

Flexcoin directs affected users to its terms of service. According to that document, Flexcoin transactions were carried out using HTTPS encryption but the company "is not responsible for insuring any bitcoins stored in the Flexcoin system."

Users should also monitor the company's Twitter account for updates about the situation, according to Flexcoin. In its most recent Twitter message, posted Tuesday, the company announced it would be "shutting its doors" and provided a link to its home page.

Flexcoin did not immediately respond to a request for comment.

Flexcoin's closure comes less than a week after Mt. Gox, a prominent Bitcoin exchange, declared bankruptcy following a hacking attack on its own site.

Just last week, Flexcoin asserted its strength in the Bitcoin industry. "We hold zero coins in other companies, exchanges, etc.," the site said in a tweet last week. "While the Mt. Gox closure is unfortunate, we at Flexcoin have not lost anything."

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com


Follow Us

Join the newsletter!

Error: Please check your email address.

Tags Internet-based applications and servicese-commercestoragesecurityBitcoin FoundationlegalFlexcoininternetservicesintrusion

Featured

Slideshows

Sizing up the NZ security spectrum - Where's the channel sweet spot?

Sizing up the NZ security spectrum - Where's the channel sweet spot?

From new extortion schemes, outside threats and rising cyber attacks, the art of securing the enterprise has seldom been so complex or challenging. With distance no longer a viable defence, Kiwi businesses are fighting to stay ahead of the security curve. In total, 28 per cent of local businesses faced a cyber attack last year, with the number in New Zealand set to rise in 2017. Yet amidst the sensationalism, media headlines and ongoing high profile breaches, confusion floods the channel, as partners seek strategic methods to combat rising sophistication from attackers. In sizing up the security spectrum, this Reseller News roundtable - in association with F5 Networks, Kaspersky Lab, Tech Data, Sophos and SonicWall - assessed where the channel sweet spot is within the New Zealand channel. Photos by Maria Stefina.

Sizing up the NZ security spectrum - Where's the channel sweet spot?
Show Comments