Flexcoin Hot Wallet Hack: Difference between revisions

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{{Imported Case Study 2|source=https://www.quadrigainitiative.com/casestudy/flexcoinhotwallethack.php}}
{{Case Study Under Construction}}{{Unattributed Sources}}
{{Unattributed Sources}}


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.
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.


This exchange or platform is based in Canada, or the incident targeted people primarily in Canada.<ref name="kylegibson-86" /><ref name="bitcointalklist-87" /><ref name="coindesk-189" /><ref name="businessinsider-190" /><ref name="theguardian-191" /><ref name="hackingdistributed-193" /><ref name="reuters-194" /><ref name="bitcoinexchangeguide-218" />
This exchange or platform is based in Canada, or the incident targeted people primarily in Canada.<ref name="kylegibson-86" /><ref name="bitcointalklist-87" /><ref name="businessinsider-190" /><ref name="theguardian-191" /><ref name="hackingdistributed-193" /><ref name="reuters-194" /><ref name="bitcoinexchangeguide-218" />


== About Flexcoin ==
== About Flexcoin ==
“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.”
Flexcoin was a bitcoin storage service based in Alberta, Canada<ref name="coindesk-189" />. Flexcoin presented itself as the solution to a major problem with Bitcoin by offering a centralized platform for managing bitcoins across various devices<ref name=":0">[https://web.archive.org/web/20140221132733/http://flexcoin.com/ Flexcoin Homepage Archive February 21st, 2014 6:27:33 AM MST] (Accessed Feb 28th, 2024)</ref>. Traditionally, bitcoins are only accessible from the device they were initially received on, limiting their usability<ref name=":0">[https://web.archive.org/web/20140221132733/http://flexcoin.com/ Flexcoin Homepage Archive February 21st, 2014 6:27:33 AM MST] (Accessed Feb 28th, 2024)</ref>. With Flexcoin, users can access their bitcoins from any web-connected device, enabling easy transactions and payments without technical expertise<ref name=":0">[https://web.archive.org/web/20140221132733/http://flexcoin.com/ Flexcoin Homepage Archive February 21st, 2014 6:27:33 AM MST] (Accessed Feb 28th, 2024)</ref>. Flexcoin described themselves as the world's first bitcoin bank, allowing users to send and receive bitcoins seamlessly<ref name=":0">[https://web.archive.org/web/20140221132733/http://flexcoin.com/ Flexcoin Homepage Archive February 21st, 2014 6:27:33 AM MST] (Accessed Feb 28th, 2024)</ref>.


This exchange or platform is based in Canada, or the incident targeted people primarily in Canada.
By centralizing bitcoin storage and offering accessibility from any web-connected device, Flexcoin promised to revolutionize how bitcoins are managed and utilized<ref name=":0">[https://web.archive.org/web/20140221132733/http://flexcoin.com/ Flexcoin Homepage Archive February 21st, 2014 6:27:33 AM MST] (Accessed Feb 28th, 2024)</ref>. Additionally, Flexcoin rewarded users with "discount payments" on positive bitcoin balances, further positioning itself as a leader in bitcoin banking<ref name=":0">[https://web.archive.org/web/20140221132733/http://flexcoin.com/ Flexcoin Homepage Archive February 21st, 2014 6:27:33 AM MST] (Accessed Feb 28th, 2024)</ref>.


The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.


Include:
“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.”


* Known history of when and how the service was started.
Flexcoin had previously emphasized the security of its bitcoin storage practices, asserting that it held zero coins in other companies or exchanges<ref name="coindesk-189" />. This stance aimed to differentiate Flexcoin from other electronic wallet providers, with the company incentivizing users to keep their bitcoin balances on its platform<ref name="coindesk-189" />.
* What problems does the company or service claim to solve?
* What marketing materials were used by the firm or business?
* Audits performed, and excerpts that may have been included.
* Business registration documents shown (fake or legitimate).
* How were people recruited to participate?
* Public warnings and announcements prior to the event.


Don't Include:
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.”
* Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
 
* Anything that wasn't reasonably knowable at the time of the event.
 
There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.
, has  after falling victim to a cyberattack resulting in the theft of 896 BTC, valued at roughly $600,000. Despite branding itself as the "first bitcoin bank," Flexcoin clarified that it was not legally classified as such.
 
 
 
One of Flexcoin's key features was its emphasis on security, implementing a ZERO link policy in emails to prevent phishing attempts<ref name=":0" />. The Flexcoin homepage described Flexcoin as "a leader in bitcoin security"<ref name=":0" />.<blockquote>Flexcoin is also a leader in bitcoin security, for example Flexcoin is the first to implement a ZERO link policy in e-mails. No e-mail sent from Flexcoin contains a link or image. If you receive one that does, it's a phishing attempt.</blockquote>Homepage: <ref name=":0" />


== The Reality ==
== The Reality ==
This sections is included if a case involved deception or information that was unknown at the time. Examples include:
Despite branding itself as the "first bitcoin bank," Flexcoin clarified that it was not legally classified as such<ref name="coindesk-189" /><ref name=":0" />. Flexcoin noted on their homepage that they do not accept traditional currencies and are not regulated by government entities like FDIC<ref name=":0" />.<blockquote>Legal Notice: We are not a true bank that accepts USD or any national currency, only bitcoins which by their nature are not regulated, we're not FDIC insured or regulated by any government entity.</blockquote>
 
* When the service was actually started (if different than the "official story").
* Who actually ran a service and their own personal history.
* How the service was structured behind the scenes. (For example, there was no "trading bot".)
* Details of what audits reported and how vulnerabilities were missed during auditing.


== What Happened ==
== What Happened ==
Line 48: Line 39:
|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
|-
|-
|
|March 4th, 2014 9:07:00 AM MST
|
|CoinDesk Article Published
|
|CoinDesk reports on Flexcoin announcing its closure after falling victim to the cyberattack. Losses are mentioned as 896 BTC, valued at roughly $600,000. The company disclosed the theft on its homepage and conceded that it lacked the resources to recover from the significant loss, leading to the immediate cessation of its operations. Flexcoin has already provided the wallet addresses associated with the hackers, revealing that the stolen funds had been transferred out of the compromised accounts. Customers who stored bitcoins in Flexcoin's cold storage were assured that they would be able to retrieve their funds, with the company facilitating the transfer free of charge upon verification of their identities.
|}
|}
== Technical Details ==
“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.”


== Total Amount Lost ==
== Total Amount Lost ==
Losses are mentioned by CoinDesk as 896 BTC, valued at roughly $600,000<ref name="coindesk-189" />.
“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.”
The total amount lost has been estimated at $600,000 USD.
The total amount lost has been estimated at $600,000 USD.


Line 59: Line 60:


== Immediate Reactions ==
== Immediate Reactions ==
In response to the breach, Flexcoin announced their closure and provided the wallet addresses associated with the hackers, revealing that the stolen funds had been transferred out of the compromised accounts<ref name="coindesk-189" />. Customers who stored bitcoins in Flexcoin's cold storage were assured that they would be able to retrieve their funds, with the company facilitating the transfer free of charge upon verification of their identities<ref name="coindesk-189" />.
Flexcoin conceded that it lacked the resources to recover the significant amount of funds lost, leading to the immediate cessation of its operations<ref name="coindesk-189" />.
How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?
How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?
"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."
“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.”
The cyberattack and subsequent theft underscored long-standing concerns within the bitcoin community regarding the security of wallet storage services like Flexcoin<ref name="coindesk-189" />.


== Ultimate Outcome ==
== Ultimate Outcome ==
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?
<ref name="kylegibson-86" />


== Total Amount Recovered ==
== Total Amount Recovered ==
There do not appear to have been any funds recovered in this case.
Only funds held in a special "cold storage" wallet were returned. Users who kept their funds in cold storage were required to pay a 0.5% fee. Customers who stored bitcoins in Flexcoin's cold storage were assured that they would be able to retrieve their funds, with the company facilitating the transfer free of charge upon verification of their identities<ref name="coindesk-189" />.


What funds were recovered? What funds were reimbursed for those affected users?
Flexcoin conceded that it lacked the resources to recover the significant amount of funds lost, leading to the immediate cessation of its operations<ref name="coindesk-189" />.
 
“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.”


== Ongoing Developments ==
== Ongoing Developments ==
What parts of this case are still remaining to be concluded?
Flexcoin provided the wallet addresses of the alleged hackers. It is not clear what tracing has been done on those funds.
== General Prevention Policies ==
Coming soon.
== Individual Prevention Policies ==
== Individual Prevention Policies ==
{{Prevention:Individuals:Placeholder}}
{{Prevention:Individuals:Placeholder}}
Line 89: Line 110:


== References ==
== References ==
<references><ref name="kylegibson-86">[https://medium.com/@kylegibson/100-crypto-thefts-a-timeline-of-hacks-glitches-exit-scams-and-other-lost-cryptocurrency-873c87fd5522 100 Crypto Thefts: A Timeline of Hacks, Glitches, Exit Scams, and other Lost Cryptocurrency Incidents] (Jan 25, 2020)</ref>
<references>
 
<ref name="kylegibson-86">[https://medium.com/@kylegibson/100-crypto-thefts-a-timeline-of-hacks-glitches-exit-scams-and-other-lost-cryptocurrency-873c87fd5522 100 Crypto Thefts: A Timeline of Hacks, Glitches, Exit Scams, and other Lost Cryptocurrency Incidents - Kyle Gibson] (Jan 25, 2020)</ref>
<ref name="bitcointalklist-87">[https://bitcointalk.org/index.php?topic=576337 List of Major Bitcoin Heists, Thefts, Hacks, Scams, and Losses] (Feb 15, 2020)</ref>
<ref name="bitcointalklist-87">[https://bitcointalk.org/index.php?topic=576337 List of Major Bitcoin Heists, Thefts, Hacks, Scams, and Losses - BitcoinTalk] (Feb 15, 2020)</ref>
 
<ref name="coindesk-189">[https://www.coindesk.com/bitcoin-bank-flexcoin-close-600000-bitcoin-theft Bitcoin Bank Flexcoin to Close After $600k Bitcoin Theft - CoinDesk] (Feb 29, 2020)</ref>
<ref name="coindesk-189">[https://www.coindesk.com/bitcoin-bank-flexcoin-close-600000-bitcoin-theft Bitcoin Bank Flexcoin to Close After $600k Bitcoin Theft] (Feb 29, 2020)</ref>
 
<ref name="businessinsider-190">[https://www.businessinsider.com/flexcoin-2014-3 Flexcoin - Business Insider] (Mar 1, 2020)</ref>
<ref name="businessinsider-190">[https://www.businessinsider.com/flexcoin-2014-3 Flexcoin - Business Insider] (Mar 1, 2020)</ref>
 
<ref name="theguardian-191">[https://www.theguardian.com/technology/2014/mar/04/bitcoin-bank-flexcoin-closes-after-hack-attack Bitcoin bank Flexcoin closes after hack attack - The Guardian] (Mar 1, 2020)</ref>
<ref name="theguardian-191">[https://www.theguardian.com/technology/2014/mar/04/bitcoin-bank-flexcoin-closes-after-hack-attack Bitcoin bank Flexcoin closes after hack attack | Bitcoin | The Guardian] (Mar 1, 2020)</ref>
<ref name="hackingdistributed-193">[https://hackingdistributed.com/2014/04/06/another-one-bites-the-dust-flexcoin/ NoSQL Meets Bitcoin and Brings Down Two Exchanges: The Story of Flexcoin and Poloniex - Hacking Distributed] (Mar 1, 2020)</ref>
 
<ref name="hackingdistributed-193">[https://hackingdistributed.com/2014/04/06/another-one-bites-the-dust-flexcoin/ NoSQL Meets Bitcoin and Brings Down Two Exchanges: The Story of Flexcoin and Poloniex] (Mar 1, 2020)</ref>
 
<ref name="reuters-194">[https://www.reuters.com/article/us-bitcoin-flexcoin/bitcoin-bank-flexcoin-shuts-down-after-theft-idUSBREA2329B20140304 Bitcoin bank Flexcoin shuts down after theft - Reuters] (Mar 1, 2020)</ref>
<ref name="reuters-194">[https://www.reuters.com/article/us-bitcoin-flexcoin/bitcoin-bank-flexcoin-shuts-down-after-theft-idUSBREA2329B20140304 Bitcoin bank Flexcoin shuts down after theft - Reuters] (Mar 1, 2020)</ref>
 
<ref name="bitcoinexchangeguide-218">[https://bitcoinexchangeguide.com/bitcoin/scams-hacks/ Bitcoin Scams and Cryptocurrency Hacks List - BitcoinExchangeGuide.com] (Mar 5, 2020)</ref>
<ref name="bitcoinexchangeguide-218">[https://bitcoinexchangeguide.com/bitcoin/scams-hacks/ Bitcoin Scams and Cryptocurrency Hacks List - BitcoinExchangeGuide.com] (Mar 5, 2020)</ref></references>
</references>

Revision as of 12:33, 28 February 2024

Notice: This page is a new case study and some aspects have not been fully researched. Some sections may be incomplete or reflect inaccuracies present in initial sources. Please check the References at the bottom for further information and perform your own additional assessment. Please feel free to contribute by adding any missing information or sources you come across. If you are new here, please read General Tutorial on Wikis or Anatomy of a Case Study for help getting started.

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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.

This exchange or platform is based in Canada, or the incident targeted people primarily in Canada.[1][2][3][4][5][6][7]

About Flexcoin

Flexcoin was a bitcoin storage service based in Alberta, Canada[8]. Flexcoin presented itself as the solution to a major problem with Bitcoin by offering a centralized platform for managing bitcoins across various devices[9]. Traditionally, bitcoins are only accessible from the device they were initially received on, limiting their usability[9]. With Flexcoin, users can access their bitcoins from any web-connected device, enabling easy transactions and payments without technical expertise[9]. Flexcoin described themselves as the world's first bitcoin bank, allowing users to send and receive bitcoins seamlessly[9].

By centralizing bitcoin storage and offering accessibility from any web-connected device, Flexcoin promised to revolutionize how bitcoins are managed and utilized[9]. Additionally, Flexcoin rewarded users with "discount payments" on positive bitcoin balances, further positioning itself as a leader in bitcoin banking[9].


“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.”

Flexcoin had previously emphasized the security of its bitcoin storage practices, asserting that it held zero coins in other companies or exchanges[8]. This stance aimed to differentiate Flexcoin from other electronic wallet providers, with the company incentivizing users to keep their bitcoin balances on its platform[8].

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.”


, has after falling victim to a cyberattack resulting in the theft of 896 BTC, valued at roughly $600,000. Despite branding itself as the "first bitcoin bank," Flexcoin clarified that it was not legally classified as such.


One of Flexcoin's key features was its emphasis on security, implementing a ZERO link policy in emails to prevent phishing attempts[9]. The Flexcoin homepage described Flexcoin as "a leader in bitcoin security"[9].

Flexcoin is also a leader in bitcoin security, for example Flexcoin is the first to implement a ZERO link policy in e-mails. No e-mail sent from Flexcoin contains a link or image. If you receive one that does, it's a phishing attempt.

Homepage: [9]

The Reality

Despite branding itself as the "first bitcoin bank," Flexcoin clarified that it was not legally classified as such[8][9]. Flexcoin noted on their homepage that they do not accept traditional currencies and are not regulated by government entities like FDIC[9].

Legal Notice: We are not a true bank that accepts USD or any national currency, only bitcoins which by their nature are not regulated, we're not FDIC insured or regulated by any government entity.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Flexcoin Hot Wallet Hack
Date Event Description
March 1st, 2014 12:00:29 AM MST Main Event Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
March 4th, 2014 9:07:00 AM MST CoinDesk Article Published CoinDesk reports on Flexcoin announcing its closure after falling victim to the cyberattack. Losses are mentioned as 896 BTC, valued at roughly $600,000. The company disclosed the theft on its homepage and conceded that it lacked the resources to recover from the significant loss, leading to the immediate cessation of its operations. Flexcoin has already provided the wallet addresses associated with the hackers, revealing that the stolen funds had been transferred out of the compromised accounts. Customers who stored bitcoins in Flexcoin's cold storage were assured that they would be able to retrieve their funds, with the company facilitating the transfer free of charge upon verification of their identities.

Technical Details

“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.”

Total Amount Lost

Losses are mentioned by CoinDesk as 896 BTC, valued at roughly $600,000[8].


“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.”

The total amount lost has been estimated at $600,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

In response to the breach, Flexcoin announced their closure and provided the wallet addresses associated with the hackers, revealing that the stolen funds had been transferred out of the compromised accounts[8]. Customers who stored bitcoins in Flexcoin's cold storage were assured that they would be able to retrieve their funds, with the company facilitating the transfer free of charge upon verification of their identities[8].

Flexcoin conceded that it lacked the resources to recover the significant amount of funds lost, leading to the immediate cessation of its operations[8].

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

"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."

“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.”


The cyberattack and subsequent theft underscored long-standing concerns within the bitcoin community regarding the security of wallet storage services like Flexcoin[8].

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

[1]

Total Amount Recovered

Only funds held in a special "cold storage" wallet were returned. Users who kept their funds in cold storage were required to pay a 0.5% fee. Customers who stored bitcoins in Flexcoin's cold storage were assured that they would be able to retrieve their funds, with the company facilitating the transfer free of charge upon verification of their identities[8].

Flexcoin conceded that it lacked the resources to recover the significant amount of funds lost, leading to the immediate cessation of its operations[8].

“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.”

Ongoing Developments

Flexcoin provided the wallet addresses of the alleged hackers. It is not clear what tracing has been done on those funds.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.

References

  1. ↑ 1.0 1.1 100 Crypto Thefts: A Timeline of Hacks, Glitches, Exit Scams, and other Lost Cryptocurrency Incidents - Kyle Gibson (Jan 25, 2020)
  2. ↑ List of Major Bitcoin Heists, Thefts, Hacks, Scams, and Losses - BitcoinTalk (Feb 15, 2020)
  3. ↑ Flexcoin - Business Insider (Mar 1, 2020)
  4. ↑ Bitcoin bank Flexcoin closes after hack attack - The Guardian (Mar 1, 2020)
  5. ↑ NoSQL Meets Bitcoin and Brings Down Two Exchanges: The Story of Flexcoin and Poloniex - Hacking Distributed (Mar 1, 2020)
  6. ↑ Bitcoin bank Flexcoin shuts down after theft - Reuters (Mar 1, 2020)
  7. ↑ Bitcoin Scams and Cryptocurrency Hacks List - BitcoinExchangeGuide.com (Mar 5, 2020)
  8. ↑ 8.00 8.01 8.02 8.03 8.04 8.05 8.06 8.07 8.08 8.09 8.10 Bitcoin Bank Flexcoin to Close After $600k Bitcoin Theft - CoinDesk (Feb 29, 2020)
  9. ↑ 9.00 9.01 9.02 9.03 9.04 9.05 9.06 9.07 9.08 9.09 9.10 Flexcoin Homepage Archive February 21st, 2014 6:27:33 AM MST (Accessed Feb 28th, 2024)
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