Two more Bitcoin exchanges get hacked, losing users’ virtual currency

Two more Bitcoin exchanges have gone down in this week, thanks to hackers who broke into their vaults and made off with digital cash.

In a statement posted on its website, Flexcoin announced it was shutting down after hackers stole 896 Bitcoins from its accounts on March 2. At the time, its holdings were worth around $665,520, writes Kevin Lee for Tech Radar.

“As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately,” the statement read, adding that only users who had Bitcoins in “cold storage” – that is, held offline, will be able to get their Bitcoins back from the exchange.

Flexcoin’s owners said they would be working with law enforcement to find out how the hack occurred, and that they would post updates to Twitter.

The other exchange to lose Bitcoins to attackers was Poloniex, which posted earlier today that it had lost about 12.3 per cent of its funds, or around $55,380.  In a post on, the owners said hackers had taken advantage of an exploit in how the system deals with negative balances. By withdrawing money several times in the same instant, the hacker created a negative balance that the system still considered valid.

When Poloniex found the flaw, it froze user withdrawals and any other activity on the exchange, but as Bitcoin transactions are irreversible, the money is gone.

“I take full responsibility for this and am committed to repaying the debt of [Bitcoin]. The exchange funds are 12.3 [per cent] short. Because there is not enough [Bitcoin] to cover everyone’s balances, all balances will temporarily be deducted by 12.3 [per cent]. Please understand that this is an absolute necessity–if I did not make this adjustment, people would most likely withdraw all their [Bitcoin] as soon as possible in order to make sure they weren’t left in that remaining 12.3 [per cent],” the owner wrote in a post on, adding exchange rates would be raised as well to cover the debt.

“Aside from the obvious drawback of most of the BTC being taken out of the exchange, this would not be fair–some people would get all of their money right away, and a few would get none right away … If I had the money to cover the entire debt right now, I would cover it in a heartbeat. I simply don’t, and I can’t just pull it out of thin air.”

News of these exchanges falling victim to hackers comes after Mt. Gox, one of the world’s largest Bitcoin exchanges, filed for bankruptcy protection last week. The company said it lost about 750,000 Bitcoins, valued at about $494.7 million, potentially taken by hackers who took advantage of a bug in its software.

For more, click the “Original Article Source” link.

Candice So
Candice So
Candice is a graduate of Carleton University and has worked in several newsrooms as a freelance reporter and intern, including the Edmonton Journal, the Ottawa Citizen, the Globe and Mail, and the Windsor Star. Candice is a dog lover and a coffee drinker.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

ITB in your inbox

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

More Best of The Web