Establishing Digital Trust: Don't Sacrifice Security for Convenience
Bitcoin bank Flexcoin recently announced that it was hit by a cyber attack on March 2, 2014 and robbed of all coins in its hot wallet -- a total of 896 Bitcoins, currently worth just under $600,000 (h/t Softpedia).
"As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately," the company said in a statement. "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," the company added.
Those terms of service state, "Flexcoin Inc is not responsible for insuring any Bitcoins stored in the Flexcoin system. You are entering into this agreement with Flexcoin Inc. You agree to not hold Flexcoin Inc, or Flexcoin Inc's stakeholders, or Flexcoin Inc's shareholders liable for any lost bitcoins."