[2014-03-04] Guardian - Bitcoin Bank, flexcoin, Closes after hack attack

[uhoh]

http://www.theguardian.com/technology/2014/mar/04/bitcoin-bank-flexcoin-closes-after-hack-attack


And may I be the first to say that these constant hack attacks are making the whole industry look ridiculous. If you have no idea what you are doing, DON'T start a Bitcoin 'Bank'. Why would a 'Bank' even be holding 896BTC in its hot wallet? Surely 100% of funds should be in cold storage until called upon.

EDIT:

"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."

What a nonsense business model.

[protokol]

Yes this is ridiculous, when I first heard this story I thought it was a small exchange, but no, they just "hold" "held" your bitcoins for you. Why anyone would have sent coins here is beyond me...

Also, could they not just make up this story and steal the 896BTC themselves? 

[Lethn]

What people should be asking with these kind of companies who on earth is stupid enough to give their Bitcoins to people who don't keep large deposits in an offline storage? Or for that matter why didn't they go and question them about their security precautions?

[Swordsoffreedom]

Some people have learned to rely on banks and can't trust themselves with coins
Kind of a bad model in bitcoin it just means you pass the buck of trust to someone else