A Second BitCoin Exchange Goes Bankrupt

Only a month after Mt. Gox, one of the biggest bitcoin exchanges in the world, went bankrupt, a second exchange has permanently closed its doors due to theft.

Mt. Gox folded due to massive mismanagement, losing millions in bitcoins when it abruptly closed early in February. A major contributor to the closing occurred after the virtual currency exchange found it had been hacked and $500 million in bitcoin stolen.

It is estimated that Mt. Gox has some $64 million in liabilities after the shut down with about seven percent of all bitcoins in existence disappearing with the failure.

Now, bitcoin exchange service Flexcoin has also announced its failure due to theft by hacking.

Now when users go to the Felxcoin mainpage, they get an announcement of the hacking.

On March 2nd 2014 Flexcoin was attacked and robbed of all coins in the hot wallet. The attacker made off with 896 BTC, dividing them into these two addresses:

1NDkevapt4SWYFEmquCDBSf7DLMTNVggdu
1QFcC5JitGwpFKqRDd9QNH3eGN56dCNgy6

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. 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 will attempt to work with law enforcement to trace the source of the hack.

Bitcoin reached a high of $1,117 per coin on December 4, but after the Mt. Gox failure it fell to less than half that amount.

This incident is yet another example of the instability in virtual currencies at this time.