Bitcoin Exchange Flexcoin Wiped Out By Theft

mrspoonsi writes "Joining MtGox, Flexcoin today announced they have had their vault wiped out, to the tune of some 896 BTC (about $615,000) by hackers. '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 [and] 1QFcC5JitGwpFKqRDd9QNH3eGN56dCNgy6. As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately.'"

surprised!!!!

[banbeans]

Not!
Which one is next?

You can't make tech safe from malice

[Catbeller]

So, it doesn't work - thousands of very bad men are trying and succeeding to break the ownership chain. No matter how hard you try to plan, you can't plan for malicious agents. And if you could, precise implementation is done by human beings, who forget where they last saw their toothbrush. . Voting machines? Trivial and done, hacked to hell and back and looks like elections were hacked ten years ago. Autonomous cars: oh, lordy lord lord, what a colossal fuck-up that will be; hubris on a scale undreamed of heretofore. Absolute perfection required of billions of kilos of metal racing around at high speed - and the designers assume bad people won't try to break it - will break it - for revenge or to make a point or just 'cause they are psychopaths.

Keep systems as simple as possible to perform their function. Don't lard layers of clever on top of things that already work. Complexity insures failure. The Bitcoin protocol can't do what must do in the real world.

Government sponsored

[arbiterxero]

So..... here's the thing.... .... while I'm no user nor defender of bitcoin, the idea seems fun...

except you're pissing off the biggest governments in the world (US, Russia, China) by creating a currency they can't control........ currency is used as a method of control ...now if I have an army of digital terrorists (APT's) and a digital currency that may undermine my rule........

well I know exactly what I'm going to do. I'm going to steal and terrorize anyone who accepts it.

Flame was ridiculously amazing, and those same programmers are still at work doing SOMEthing..... I'd bet they had a hand in some of these.... they seem too well co-ordinated, first one, then as the media coverage starts to die, another....and wait a week, we'll hear of a third.

Re:So, doomed to fail?

[jythie]

BTC as a protocol no, but as an ecosystem it is still open to debate. With USD there are rules regarding who can act as a bank and what procedures they need to follow and, in exchange, if something goes wrong with said bank FDIC will help the people hurt by it. So the ecosystem around USD means greater stability and trust in financial institutions, even small ones.

Hmmmm

[jeff13]

Ya know, I'm reminded of the words of one William K. Black (UMKC School of Law), economist and, and the only combination of the two to exist, a criminologist. He was once asked, what is the best way to rob a bank? His answer was; 'be a banker'.

Really, the entire Bitcoin story has been one that was highly suspicious all along. Have you ever read a Bitcoin story that didn't make your left eyebrow raise like Mr. Spock in a room full of illogic? I watched 'The Wolf of Wall Street' recently and thought, *pffft*, soooo dated. I reckon in 20 years someone in Hollywoodland will catch up with reality enough to make a film in that vein about Bitcoin.

Re: When are the bank runs going to happen?

[AudioEfex]

It hasn't crashed yet because the current BitBelievers are buying up the stock folks are selling off, thinking they are getting "fire sale" prices. So it's the same people who are already in that are presumably spending all the legal tender they can muster to buy more to hoard away. One of them described it to me on this board as him "putting my money where my mouth is". I think he may have been almost right, he just didn't follow through the entire statement where he then places the money in his mouth, chews on it, swallows it, digests it, and then deposits it in a toilet somewhere before flushing it away.

The Best Way to Rob a Bank is to Own One

[Wookie Monster]

What was the true intent of the exchange? Lure in suckers and then claim they were hacked? How can they prove that an outsider stole the coins?

www.amazon.com/Best-Way-Rob-Bank-Own/dp/0292754183/

Re:Unregulated currency

[Captain Splendid]

Bitcoin protocol

He wasn't talking about protocol, just the dumb libertarian ideas behind it.

Re:surprised!!!!

[Spamalope]

Which one is next?

The one the governmental actors target? We know they want to discredit bitcoin. Why not make the effort profitable too? Stealing bitcoin discredits bitcoin while providing 'clean' funds for covert operations. Win-Win!

The folks who created Stuxnet could do this without a doubt. Why is anyone assuming this is being done by 'criminals'?

Hell Of It Is

[Greyfox]

It's all that Eve online ISK scam crap all over again. You can run a ponzi scheme in Eve, and the suckers will buy into it every time. At the end of the day you can walk away with enough isk that at the current exchange rate you could end up affording a pretty nice Honda. Or some so-so medical care. Really, Eve just needs a bitcoin interface and they'd be positioned to be the number one bitcoin investment firm in the world. At least until the whole thing collapses. I never cease to be amazed how often suckers fall for it, even when you mention the LAST scam in the channel they're advertising in.

Of course, if bitcoin itself goes bust due to a reputation for this sort of thing, all that hacking and all that farming will be for naught.

Re:Unregulated currency

[i kan reed]

No, it's what we get from the pro-bitcoin crowd. The people who think impossible-to-regulate transactions are a good idea happen to have a 100% overlap with the set of people who have a novice's understanding of economics, and apply that cudgel to all ideas.

No conspriacy theory needed

[sjbe]

Why is anyone assuming this is being done by 'criminals'?

Because that is by far the most likely answer. These are almost certainly the equivalent of digital bank robbers. Where there is poorly secured money to be stolen it will be stolen. Furthermore if you steal something you are by definition a criminal even if you are something else as well.

I know that folks involved in bitcoin like to invoke grand government conspiracies (they seem to be a bit paranoid) but the government doesn't have to steal bitcoins. If the government wants to squash bitcoin it will pass some laws and regulations and make it illegal to deal in bitcoins. Why go though the window when you can smash down the door?

Re:surprised!!!!

[Anonymous Coward]

you don't get out much do you?
More than likely the biggest bitcoin bashers were simply looking to depress the market so that they could buy low, then sell high once that they gain more value
I have learned (from the blessing of the dotcom crash and telecom meltdown) to be skeptical, it is the only way to preserve your sanity in turbulent times
My primary concerns about bitcoin had to do with their handling of transactions, considering the long time to verify that was required
It seems that that was only one of the Achilles heels of the system
What remains to be seen is how the 'community' steps up to provide assistance in preventing these problems from capsizing the whole project

unless of course it was just a massive fleecing from the get go

Re: When are the bank runs going to happen?

[mattack2]

Bitcoin isn't failing, rather the exchanges are, just like if the crooks had robbed a physical bank of all your paper money.

But if crooks rob a physical bank, your money is insured to the legal limit.

BTW, I've been listening to the old Planet Money podcast episodes (I started at the beginning and am now in early 2009), and the FDIC insurance isn't provided by the government, it's provided by payments the banks make to be FDIC insured.