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A Massive Theft Shut Down A Major Bitcoin Bank

By 03.05.14

Flexcoin is, despite our mockery of Bitcoin, actually a pretty good bank. They set out to make using Bitcoin as simple as banking in other currencies, and they did a lot to make that work. Unfortunately, they’re as easy to take out as any other Bitcoin bank.

Simply put, Flexcoin got robbed. It’s not Mt. Gox’s $350 million implosion, but it’s still pretty bad, according to 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.”

Flexcoin lost 896 Bitcoins worth $692,000, albeit they won’t hold their value for long at this rate. The good news is that users who had their Bitcoin in “cold storage”, that is, computers not connected to the Internet, will get their coins back; the $692,000, though, is basically dust in the wind.

It’s true that Bitcoin heists are pretty common, and often for ridiculous sums, but this is starting to get ridiculous. It’s true that what we’re seeing is a Wild West of sorts as the Internet tries to work through what a digital currency like this needs to have in order to exist. On the other hand, putting a few thousand dollars into that experiment seems, at best, a really bad idea right now.

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