Flexcoin closes after theft of all bitcoins in hot wallet

By Nicel Jane Avellana

Mar 05, 2014 02:07 PM EST

Flexcoin has shut down after it got breached and all bitcoins stolen, PCWorld reported citing an announcement from Flexcoin's website.

The attack, which occurred on March 2, robbed all coins in the bank's bitcoin online storage, which it calls its "hot wallet." A total of 896 bitcoins were stolen which would have a value of $600,000 at today's price, the report said.   

The announcement on Flexcoin's website read, "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."

However, the coins placed on "cold storage" were not stolen since they were placed offline and will then be returned to its owners. Flexcoin said in the announcement, "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."

Flexcoin added that they will be working with the authorities to determine who orchestrated the attack. The platform also directed owners whose bitcoins were stolen to the terms of service it agreed to when it signed up with the platform. That document stated that although transactions were protected with HTTPS encryption, Flexcoin "is not responsible for insuring any bitcoins stored in the Flexcoin system," the report said.

Flexcoin is the second bitcoin platform to close shop in recent weeks. Tokyo-based Mt. Gox sought bankruptcy protection less than a week ago after losing 850,000 bitcoins due to an attack undertaken on the site. Ironically, it was only last week when Flexcoin tweeted about the Mt. Gox incident, "We hold zero coins in other companies, exchanges, etc. While the Mt. Gox closure is unfortunate, we at Flexcoin have not lost anything."

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