Another Bitcoin Bank Goes Bust – Flexcoin Reports $600,000 Theft

Bitcoingeralt / Pixabay

Another bitcoin wallet has been hit by cyber-thieves, resulting in a total shut-down. This time, it’s Flexcoin, which reported on its website that hackers stole all of the bitcoins in its wallet on Sunday. That amounted to 896 bitcoins, which hackers took to two Internet addresses which Flexcoin lists. At current prices, that’s more than $600,000 worth of crypto-currency.

Flexcoin closes

The exchange said it will contact all users who had their bitcoins in its cold storage. Flexcoin will ask them to verify their identities, and at that point, their coins will be transferred out of the exchange at no charge. The company defines “cold storage” as being its offline storage facility for the digital currency, which was not reachable by the hackers.

All other users will be sent to the company’s Terms of Service page, which they had to agree to upon signing up to use the site. Flexcoin said it will work with law enforcement to trace the source of the attack and post updates on Twitter.

Bitcoin believers carry on

Flexcoin is the second bitcoin exchange to announce it was closing its doors this week. Mt. Gox, which was once the largest exchange for the digital currency in the world, filed for bankruptcy early this week. The Japanese exchange said hackers stole about $480 million worth of the crypto-currency. In spite of that though, the company said it would continue trying to do business.

In spite of these two collapses, bitcoin enthusiasts just won’t give up on it. In fact, U.S.-based exchange CoinBase shows that the digital currency is trying at just under $700. Although prices topped $1,000 in late November and early December, they declined as a number of events hinted at problems with the crypto-currency. However, prices have begun to recover in March, climbing from the $550 range within just days.

We heard back in November that hackers stole from another online digital wallet company. You would think that after that first theft, other wallets would have learned that it’s not a good idea to store the digital currency in computers which are connected to the Internet, but unfortunately that doesn’t appear to be the case.

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About the Author

Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at Mjones@valuewalk.com.

1 Comment on "Another Bitcoin Bank Goes Bust – Flexcoin Reports $600,000 Theft"

  1. These hackers’ timing is suspect, as is Flexcoin’s decision to come clean with the story now- right after Mt. Gox?

    In my opinion, this appears to be a well organized ploy to totally eradicate Bitcoin or drive down its values.

    This could be because of either of two reasons (or both)

    1. Bitcoin’s deflationary qualities makes it more of an asset than a currency- users buy it so that they can hold on and hopefully get better values in future (unlike with currency where values decline in the future). If Bitcoin succeeds as an asset, it could disrupt a lot of things, and more accurately, businesses involved in trading more accepted assets such as gold. This thereby acts as a motivation to suppress the rise of Bitcoin either through hired hacks etc.

    2. The ‘opponents’ of Bitcoin know that it is an asset. After all,Norway classifies it as an asset and its qualities- from a strict academic standpoint- make it an asset and not a currency. So, it is possible that the ‘opponents’ know that it is an asset and want to use the negative publicity to drive down values and perhaps stock more when its more affordable.

    Either way, we need more regulation so that this ends. This is clear manipulation of an upcoming market of virtual assets (virtual currency is a misnomer). and should be illegal.

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