05 Mar 2014

Flexcoin Bank to Shut Down After $600,000 Bitcoin Heist

Canadian bitcoin bank Flexcoin will shut down after it suffered a heist of  896 bitcoins worth about $600,000 this week, the bank said in a press release.

Thieves stole all the bitcoins stored in the hot wallet in the March 2 attack on the bitcoin bank. The attack exploited a flaw in the code that permits transactions between Flexcoin users.

Thousands of simultaneous requests were sent to “move” the bitcoin amounts from user to user account until the sender was overdrawn. All these were made before the balances were updated.

“Users who put their coins into cold storage will be contacted by Flexcoin and asked to verify their identity,” the bank said. “Once identified, cold storage coins will be transferred out free of charge.”

The attack was the second to hit bitcoins this week, as 12 per cent of the bitcoins on the Poloniex exchange were also stolen. The Poloniex exchange heist exploited another withdrawal vulnerability.