Another Bitcoin Bank "Loses" Its Deposits

Tyler Durden's picture

Just six days after proudly proclaiming that it was unscathed by the Mt.Gox debacle, another Bitcoin bank - Flexcoin - has admitted that it will be forced to close after hackers stole 896 bitcoin, worth around $600,000, in an attack on Sunday. As The Guardian reports, the company shut its website and posted a statement on Tuesday morning detailing the loss..."as Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately."


Six days ago:




And today:




Via The Guardian,

“On March 2nd 2014 Flexcoin was attacked and robbed of all coins in the hot wallet,” the statement read. “As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately.”


Not all of the company’s assets were stolen. In line with best practices for running a bitcoin financial service, Flexcoin held some bitcoins in “cold storage”, keeping them on devices not connected to the internet. Those bitcoins are safe, but only users who explicitly requested their bitcoins be held in cold storage (and paid a 0.5% fee) benefit.


Users who put their coins into cold storage will be contacted by Flexcoin and asked to verify their identity,” the statement continues. “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 will attempt to work with law enforcement to trace the source of the hack.”




Flexcoin’s closure follows that of MtGox’s, blamed on hackers stealing 750,000 bitcoins by exploiting a bug known as “transaction malleability”. Several other bitcoin businesses, both high- and low-profile, have gone under. Services including Bitcoinica, and MyBitcoin have all been hacked, each losing thousands of bitcoins.

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camaro68ss's picture

if its not in your hands, you dont own it!

prains's picture

bonestar you may as well start your own and call it BENDover Coin

Chuck Norris's picture

All your bitcoin are belong to us

fonestar's picture

That's right.  The hackers are taking out the weak stragglers from the herd.

BaBaBouy's picture

Can You Spell: "FLAWED" Coin ???

fonestar's picture

How is it flawed you fucking moron?  What does this have to do with Bitcoin?  This is a network security issue.

nope-1004's picture

And therein lies the problem with fantasy money.  There are no assets in these cryptocurrencies.  Their current state is a work in progress exploring ways of transacting P2P and until all the bugs are worked out (if ever), theft, loss, and volatility are simply going to happen.


fonestar's picture

"If you can't hAck your exchange you don't p0wnz them".

BTCTalks's picture

If you're wondering where the coin went, ther were directed to these two addresses.  Perhaps someone with more technological know-how than I can track them down.  Not holding my breath, however.



MagicHandPuppet's picture

All your Bitcoin are belong to us!

EDIT: dang, someone beat me to it!

Fukushima Sam's picture

I just checked on my PMs. Still there, no bugs to be found.

fonestar's picture

It's pretty obvious most of you are just mad.  Think about it objectively for five minutes... what is a more likely scenario?  Kids and young people going back to the 19th century and trading gold and silver bars & coins?  Or people adopting new, faster 21st century technologies like Bitcoin?  It seems pretty obvious to fonestar.

JohnnyBriefcase's picture

Actually, nobody seems mad at all.

Boris Alatovkrap's picture

Boris is mad. Mad at bank for fiat currency, mad at state for spend wealth of nation as denote in fiat currency, mad at daze and confuse sheeple for put up for dirty incestuous fornication of state and bank.

fonestar's picture

Nobody has to choose between owning silver and owning Bitcoin.  Oh, except stupid simpletons.... yes, they have to choose.

fonestar's picture

Why would a .gov blogger work to undermine confidence in USD?  Face it, not only are most of you too fucking stupid to ever hope to understand Bitcoin most of you are just too stupid to live.

Toolshed's picture

You have tirelessly pimped bitcrap and stated repeatedly that these exchange collapses were positive for bitcrap. Seems likely that the best way to destroy bitcrap, and thus make the dollar appear stronger by comparison, would be to lure the suckers into bitcrap and then generate massive volatility and uncertainty which would result in fear and suspicion of bitcrap among the masses. Since this scenario is exactly what has happened, the insinuation seems valid. However, I am personally familiar with numerous .gov employees, and fonestar is simply much too incompetent to secure, or maintain, .gov employment.

fonestar's picture

Ah "massive volatility" you panty-waste?  What did you expect from a hyperdeflationary currency as priced in inflationary nationalist currencies?  Seriously, grade 8 math students should be failed for not understanding such basic concepts.

Toolshed's picture

But I thought it was supposed to be a medium of exchange? Volatility is bad for a medium of exchange according to eighth grade math. Your sour grapes are showing looney tune.

fonestar's picture

Lots of sellers are already pricing in Bitcoin and some people already working in fixed Bitcoin regardless of dollar value.

If you think your American "dumb guy = tough guy" shtick is going to fly in the BitWorldOrder prepare to get ass raped hard.

Squid-puppets a-go-go's picture

fonestar, this post is out of concern and not a personal attack.

If you are not a troll and your whole sense of identity is really as obsessively invested in bitcoin as much as it comes across in the million ZH posts you've written, then I have serious concerns for your sense of mental health as bitcoin falters. You do not have the temperence that is required of someone who is riding such a precarious wave, and as bitcoin seems to be coming apart your absence of humility suggests a disconnect. It is absolutely appropriate for anyone, even if they have great faith in bitcoin, to take stock given the circumstances.

Bitcoin is a fabulous idea. But like the electric car, it has powerful enemies and it is not an infallibile certainty. This is not the fledgling 'foundation empire' of Asimov's sci-fi fable. Your personal sense of identity seems hostage to this crypto currency, and like love and family and dignity and truth, safeguarding your sense of identity is more important than financial prosperity. Your importance as a person is not dictated by how accurately prescient you are about bitcoins future

I strongly recommend you unhitch your wagon. Even if bitcoin goes to the moon, you will be a richer man for it.

digi's picture

Don't get too overdramatic. I am sure fonestar is having loads of fun pissing all over everyone who told him otherwise here on ZH with his 600% YTD investment. If that is what you call "coming apart" I'm not sure that fonestar is the one with a disconnect here.

Gadocat99's picture

It's panty waist.  Refers to children's clothing style (1930's), meaning you are a child-like person.  In this context, it doesn't make much sense.  But, you need to be given some slack -- you are having a bad day... (week?).

fonestar's picture

fonestar is having a bad life.  But he is getting a bit richer by the day.

Rikeska's picture

But I want to believe!

Mercuryquicksilver's picture

fonestar is simply much too incompetent to secure, or maintain, .gov employment.


Respectfully disagree.

digi's picture

"too incompetent to secure, or maintain, .gov employment."

Oh man, it's been a while since I literally laughed out loud, but that one got me. As if you could be "too incompetent" to work for the govt. 

Scoobywan's picture

I agree with your last statement, the world is filled with idiots. Unfortunately I also include you in your last statement.

fonestar's picture

fonestar will give the Zerohedge community credit for being two points smarter than the stawks crowd.  But compared to the hackers & cryptoanarchists you're a bunch of dumb apes.

TruthInSunshine's picture

fonestar is now pumping anuscoin to his family & friends.

It's a digital currency where you deposit assets into it & watch it ultimately turn into shit.

OpenThePodBayDoorHAL's picture

The ZH war on Bitcoin continues. Who would have thought a site like this would be on the wrong side of a battle like this. C'mon, "site loses $600k"? What was the amount robbed from people in the US via Fed theft, Wall St theft, LBMA theft? 

666's picture

Why do I have a sneaking suspicion that the NSA was the hacker of this and Mt Gox? Especially after Congress said they have no problem with BitCoin.

fonestar's picture

fonestar doubts there is a relationship between this and the testimony.  But yes, if the intelligence community wanted to accumulate Bitcoin without buying it, they might go about hacking exchanges.  Maybe they can get the "Syrian Electronic Army" to do that for them?

Occident Mortal's picture

From what I have seen Bitcoin is about as secure as Internet Explorer.


You use it over the internet, it's an electronic currency, but any determined hacker can basically clean you out.


If large companies with hundreds of millions of dollars can get hacked, what chance does an individual stand?

fonestar's picture

That's bullshit plain and simple.  Bitcoin has never been hacked, never had any security issues.

angel_of_joy's picture

World needs suckers like you...

Rylie's picture

Tell that to the people that just lost 600K.

You dont have to hack a Bitcoin user, just hack the exchanges they have more coins.

fonestar's picture

Yeah, so don't keep your coins on an exchange.  Why is that so difficult to understand?

Crash Overide's picture

Do you and the BTC underground meet in dark alleys and exchange USB drives all cloak & dagger style?

That's like so 80's bro...

JLee2027's picture

Yeah, so don't keep your coins on an exchange. 

If there is no exchange, what is the purpose? Might as well be buried 6 feet down in a secret location in Siberia.

digi's picture

Today's exchanges are coded lazily at best. You can hold your own bitcoins on your own computer or even a piece of printed out paper if you really want to get hack proof. You can send these btc's to anyone you'd like to do business with, there is no need for exchanges to transact. In the future exchanges will be setup so that the owner of the exchange are not holding your coins. There's nothing stopping this from happening right now other than its easier to do it the lazy way and there are plenty of people dumb enough to let others hold their coins for them. We are now starting to see how that strategy works out, spoiler alert, you lose your coins. I expect a few more exchanges to go down in this manner before people demand 2nd generation exchanges that don't hold the users coin. This same thing has been going on for longer in the bitcoin black markets and it seems after about 5 massive thefts the users have finally learned thair lesson and the more secure exchanges that don't hold all users coins are starting to become more popular as the remaning old ones who havent stolen yet die off from lack of trust.

Mercuryquicksilver's picture

But I checked your wallet, and you still keep your <2 coins on the same exchange.

fonestar's picture

fonestar does not keep any coins on any exchange ever.


tmosley's picture

>Gold Has never failed

>Tell that to the people who had their gold stolen by MF Global

Double your pleasure with Doublestandard Gum.

Toolshed's picture

You have now demonstrated your utter lack of knowledge. Well done!!

fonestar's picture

No, he just exposed your epic stupidity.