Bitcoin Bank FlexCoin Closes After Hacker Toys with Weak Code

[MicroGuy]

The World’s first Bitcoin bank has closed after a hacker discovered a weakness in the company’s code and made off with $600,000 in bitcoins.

FlexCoin, a bitcoin storage service that boldly claimed to “solve nearly every problem that exists with the Bitcoin currency today”, has shutdown after losing 896 bitcoins from its front-end. Yesterday, the company explained that the problem resulted in a design flaw in the site’s hot wallet:

    "The attacker then 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."

According to a report by PC World there is some uncertainty as to whether all users will be refunded as the site’s terms of services states that the company “is not responsible for insuring any bitcoins stored in the Flexcoin system.” And the company’s updated website message states:

    "As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately."

This news is being widely circulated among major news outlets this morning at a time when the mainstream media apparently has an appetite for negative bitcoin news. A lot of the reporting tends to place the blame on Bitcoin when in reality these problems are caused by shoddy operations and negligent management.

Today’s market price is down 4.5%  with bitcoins trading at $662.00 at last check, according to Coinmarketcap.com.

Full Story: http://altcoinpress.com/2014/03/bitcoin-bank-flexcoin-closes-after-hacker-toys-with-weak-code/

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[murraypaul]

According to a report by PC World there is some uncertainty as to whether all users will be refunded as the site’s terms of services states that the company “is not responsible for insuring any bitcoins stored in the Flexcoin system.” And the company’s updated website message states:

    "As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately."

So where is the uncertainty?
It is clear that people will not get their money back.

[QuestionAuthority]

The World’s first Bitcoin bank has closed after a hacker discovered a weakness in the company’s code and made off with $600,000 in bitcoins.

FlexCoin, a bitcoin storage service that boldly claimed to “solve nearly every problem that exists with the Bitcoin currency today”, has shutdown after losing 896 bitcoins from its front-end. Yesterday, the company explained that the problem resulted in a design flaw in the site’s hot wallet:

    "The attacker then 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."

According to a report by PC World there is some uncertainty as to whether all users will be refunded as the site’s terms of services states that the company “is not responsible for insuring any bitcoins stored in the Flexcoin system.” And the company’s updated website message states:

    "As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately."

This news is being widely circulated among major news outlets this morning at a time when the mainstream media apparently has an appetite for negative bitcoin news. A lot of the reporting tends to place the blame on Bitcoin when in reality these problems are caused by shoddy operations and negligent management.

Today’s market price is down 4.5%  with bitcoins trading at $662.00 at last check, according to Coinmarketcap.com.

Full Story: http://altcoinpress.com/2014/03/bitcoin-bank-flexcoin-closes-after-hacker-toys-with-weak-code/

It's an epidemic. I'm not losing faith in Bitcoin. I'm losing faith in any means of storing anything of value connected to the internet. Can't these hackers go back to playing with NSA and FBI computers.

[got2bereal]

I don't think hackers have the upper hand, I believe because of the nature of how bitcoins work.  You can't run a company anymore because any worker with knowledge of your code can empty your company's acct easily with anonymity.   Just like how most armored truck robberies are committed by inside jobs.  

It takes a great deal of luck and skills to gain access to any avg company's network with just decent set of security. The easiest method is to find someone inside that has the keys and how do we know who's trust worthy these days.  Bitcoin provides all of the ease and anonymity with stealing from your company.

[Joshuar]

I have the perfect solution, just like how Bitcoin is decentralized, the same could be for an exchange, thought the creator of the exchange gets 1% of Bitcoins exchanged per day. That's to give incentive..Btw, there's no such thing as a truly decentralized exchange, where it doesn't need someone in charge, we're years away from that type of technology.