Move Bitcoin wallet to new computer
Bitcoin bank Flexcoin has shut down after it was unable to cover losses from a hacker attack in which 896 bitcoins were lost – valued at $570, 000 according to The Guardian’s report.
The attackers were able to steal all the bitcoins stored in the bank’s “hot wallet” – the portion of its funds on computers accessible via the internet – due to a transaction flaw in its code. Much of the bank’s assets was in “cold storage” – ie on devices not accessible via the web,but the bank was unable to cover the losses from the theft.
The closure comes just days after Mt Gox lost a reported $500m in a theft which the exchange claims was due to hackers exploiting flaws in the site code,as reported by We Live Security here. Flexcoin said in a statement,“We have failed the Bitcoin community.”
Flexcoin said in a statement,“On March 2nd 2014 Flexcoin was attacked and robbed of all coins in the hot wallet. The attacker made off with 896 BTC. As Flexcoin does not have the resources,assets,or otherwise to come back from this loss,we are closing our doors immediately.
“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.
“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.This was then repeated through multiple accounts,snowballing the amount,until the attacker withdrew the coins.”
Another bitcoin exchange,Poloniex,admitted that it had lost 12.3% of its reserves to hackers exploiting a security flaw,according to the Guardian’s report. Poloniex’s owner said in a statement, “ I take full responsibility; I will be donating some of my own money,and I will not be taking profit before the debt is paid.” The Guardian commented that the recent spate of large-scale thefts highlighted a broader problem with security.
Flexcoin said in a statement,“Flexcoin has made every attempt to keep our servers as secure as possible,including regular testing. Having this be the demise of our small company,after the endless hours of work we’ve put in,was never our intent. We’ve failed our customers,our business,and ultimately the Bitcoin community.”
This week,bitcoin exchange Mt Gox admitted that nearly $500 million in bitcoin had “disappeared” a new statement posted online – as computer code posted on Pastebin appeared to be part of the backend for the exchange,which would tally with CEO Mark Karpele’s claims that the site was hacked,as reported by We Live Security here.
