A Canadian “Bitcoin bank” claiming to have fixed Bitcoin’s security problems, has been forced to close after hackers stole its digital currency.

Flexcoin said that 896 bitcoins were stolen in the hack, worth around $600,000 at current exchange rates, and that they could not recover financially from the breach.

Whilst many have mocked the company’s claims about security, not all bitcoins held by the bank were stolen in the hack, as they held much of the currency in “cold storage”, servers unconnected to the internet and therefore impossible to attack remotely. Bankers who chose to store their bitcoins in cold storage have been contacted by the bank to be told how they can withdraw their digital currency free of charge.

This hack comes just a week after the collapse of the once leading bitcoin exchange Mt. Gox, with the Japanese site also a target of hackers.

The anonymous nature of the cryptocurrency, with it near impossible to trace fund transfers, remains both its biggest asset and flaw.


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