FLEXCOIN

DESCRIPTION OF EVENTS

“Alberta-based bitcoin storage specialist” “Flexcoin aimed to differentiate itself from other electronic wallet providers by incentivizing users for keeping their bitcoin balances on the site.” 6 days after bragging that “We hold zero coins in other companies, exchanges etc. While the MtGox closure is unfortunate, we at Flexcoin have not lost anything.” "Flexcoin has announced that it will shut down following an attack and subsequent robbery that saw cybercriminals abscond with 896 BTC (roughly $600,000 at press time) stored in the company’s hot wallets." “The attacker successfully exploited a flaw in the code which allows transfers between flexcoin users. By sending thousands of simultaneous requests, the attacker was able to "move" coins from one user account to another until the sending account was overdrawn, before balances were updated.” “The site was itself broken from the ground up. The hackers simply got it to do what it was programmed to do, a lot faster than normal.” “As Flexcoin does not have the resources, assets or otherwise to come back from this loss, we are closing our doors immediately.” “Flexcoin also provided the wallet addresses of the alleged hackers. The largest wallet of which received 592.1 BTC from the breach, while the smaller of the two held at one point 304 BTC supposedly taken from the website.” “As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately.” “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. 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. All other users will be directed to Flexcoin's "Terms of service" located at "Flexcoin.com/118.html" a document which was agreed on, upon signing up with Flexcoin.”

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Flexcoin was a service that allowed users to send their bitcoins to other users quickly and more conveniently than through standard bitcoin. While hackers of course got into the hot wallets, all customers who had utilized the available cold storage service (available for an extra charge) were able to retrieve their funds. The company walked away and did nothing to assist the hot wallet users, however at least they were quick about it.

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List of Major Bitcoin Heists, Thefts, Hacks, Scams, and Losses (Feb 15)
Bitcoin Bank Flexcoin to Close After $600k Bitcoin Theft (Feb 29)
Flexcoin - Business Insider (Mar 1)
Bitcoin bank Flexcoin closes after hack attack | Bitcoin | The Guardian (Mar 1)
NoSQL Meets Bitcoin and Brings Down Two Exchanges: The Story of Flexcoin and Poloniex (Mar 1)
Bitcoin bank Flexcoin shuts down after theft - Reuters (Mar 1)
Bitcoin Scams and Cryptocurrency Hacks List - BitcoinExchangeGuide.com (Mar 5)

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