Two more Bitcoin exchanges fall prey to hacker theft

A pair of Bitcoin exchanges have gone down after a bout of hacking attacks.

Flexcoin announced that its virtual vault was emptied by internet thieves and that it will be shutting down immediately. In a statement, the exchange said hackers hit the bank on March 2 absconding with 896 Bitcoins.

According to Flexcoin, its holdings at the time totaled to around US$600,000 in value (about AU$670,915) before the stolen coins were moved to two fake addresses.

"As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately," the company wrote on its website.

Flexcoin said it would contact investors who kept the coins they had tied with the company in cold storage - a non-networked hard drive disconnected from the Internet - to transfer their safe Bitcoins out free of charge.

Virtual banking problems

The second bad news item for Bitcoin's longevity came from Poloniex, which admitted it lost 12.3-perecnt of its cryptocurrency funds in an estimated US$50,000 (about AU$55,909) theft.

Poloniex explained that hackers carried out an exploit allowing them to take advantage of how its system handled negative balances. By placing several withdrawals in practically the same instant, the hacker was able to create a negative balance that was still considered valid.

After discovering the flaw and fraudulent withdrawals, Poloniex informed the market freezing all withdrawals and activity on the exchange. The exchange owners said they will help pay out the loss with company funds and out of their own pocket.

Meanwhile, all markets and withdrawals for Poloniex are frozen until the negative balance watcher is written and balance deductions are calculated.

Things aren't looking up for Bitcoin

The two thefts follow the collapse of Mt. Gox, one of the world's largest Bitcoin exchanges. The Japanese company lost roughly 750,000 Bitcoins at value of roughly US$380 million (AU$425 million) and has since filed for bankruptcy with debts of 6.5 billion yen (AU$71 million).

The Bitcoin market has gone through a world of hurt over these last two weeks. For now it seems Bitcoin itself is still secure but the financial institutions are less so.

The best bet users have to keep ahold of their Bitcoins is to secure their virtual money on a hard drive that's not connected with the Internet through a service like Bitcoin Armory.

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