Bitcoin bank Flexcoin shuts after theft

March 4th, 2014 in Technology / Security
A man talks on a mobile phone in a shop displaying a bitcoin sign in Hong Kong on February 28, 2014


A man talks on a mobile phone in a shop displaying a bitcoin sign in Hong Kong on February 28, 2014

An alleged theft by hackers forced another online business serving bitcoin traders and investors to shut down Tuesday.

Flexcoin, which billed itself as a bank for the virtual, crypto-currency, said someone attacked its systems and stole nearly $600,000 worth of bitcoin.

"On March 2nd 2014 Flexcoin was attacked and robbed of all coins in the hot wallet. The attacker made off with 896 BTC," the company posted on its website.

"As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately."

The company, which took deposits of bitcoin but was not regulated, insured or guaranteed like regular banks, said it would return bitcoins to verified customers who put them in its "cold storage."

The company, located in Alberta, Canada, said it "will attempt to work with to trace the source of the hack."

The closure came just two weeks after the collapse of the Japan-based Mt. Gox, which at one time was the world's largest bitcoin exchange.

Mt. Gox said unknown hackers exploited weaknesses in the computer coding and security that underlies bitcoin and stole some $500 million in worth from it.

Also on Tuesday a small bitcoin exchange, Poloniex, reported a theft, according to statements on an unverified Twitter account and a posting on the widely used Bitcoin Forum.

© 2014 AFP

"Bitcoin bank Flexcoin shuts after theft." March 4th, 2014. http://phys.org/news/2014-03-bitcoin-bank-flexcoin-theft.html