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March 5, 2014updated 04 Apr 2017 4:08pm

Bitcoin bank Flexcoin shuts down after being “robbed of all coins” in hot wallet

Canadian Bitcoin bank, Flexcoin has shut down after a hacker allegedly stole BTC896 ($597,000).

By Hannah Smithies

Canadian Bitcoin bank, Flexcoin has shut down after a hacker allegedly stole BTC896 ($597,000).

Users with coins in the virtual bank have lost all money, with only coins in "cold storage" (kept offline) being retrievable.

A statement on the Flexcoin website said: "On March 2nd 2014 Flexcoin was attacked and robbed of all coins in the hot wallet. The attacker made off with 896 BTC."

The alleged hack was enabled by a flaw in the front-end of the exchange system.

The hacker, exploiting a flaw in the code, was able to steal coins and direct them into a private account during the process of customers transferring coins from one account to another. This process was repeated extensively until the final amount was attained.

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

They are working with law enforcement to track the source of the hack and those responsible but will not reopen.

Flexcoin has issued a general apology to its customers, explaining, "In our three years of existence we have successfully repelled thousands of attacks. In the end, this was simply not enough."

"We’ve failed our customers, our business, and ultimately the Bitcoin community."

News of Flexcoin’s collapse comes soon after the closure of the MtGox Bitcoin exchange in Japan, which shut down on 25 February due to an alleged hacking attack

At the time of writing, one Bitcoin was valued at $666 on Slovenia-based exchange Bitstamp.


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