Bitcoin bank closes after high-tech heist

Bitcoin bank closes after high-tech heist

Bitcoin bank closes after high-tech heist

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Associated Press

Posted on March 5, 2014 at 3:00 AM

Updated Wednesday, Mar 5 at 6:23 PM

SAN FRANCISCO (AP) — A bank specializing in bitcoins says it has closed after computer hackers robbed its digital currency.

The closure of the Flexcoin bank comes just a week after the collapse of Mt. Gox, a major bitcoin exchange.

Mt. Gox also linked its demise to an electronic heist.

In a Tuesday notice, Flexcoin says 896 bitcoins were stolen from its online vault. That translates into a loss of about $600,000, based on bitcoin's current trading value.

Unlike banks dealing in government-backed currencies, Flexcoin's losses aren't covered by deposit insurance. The Alberta, Canada, bank says it can't recover from the setback.

Flexcoin says bitcoins stored offline remain secure.

The twin failures of Mt. Gox and Flexcoin will likely raise more doubts about bitcoin's ability to establish itself as an alternative currency.

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