clock menu more-arrow no yes

Filed under:

Bitcoin exchange BitFloor suspends operations after $250,000 theft

New, 33 comments

Popular Bitcoin exchange BitFloor has been forced to suspend operations after roughly 24,000 coins (roughly $250,000) was stolen in a virtual heist.

Bitfloor downtime message
Bitfloor downtime message

Popular Bitcoin exchange BitFloor — described by its owner as "the #4 USD exchange and #1 in the US" — has been forced to suspend operations after the equivalent of $250,000 was stolen in a virtual heist. Writing in a post on the Bitcoin Forum last night, founder Roman Shtylman explained that an attacker had gained access to an unencrypted backup of the exchange's wallet keys, using them to transfer "the vast majority of the coins BitFloor was holding on hand," a haul which Shtylman later pegged at around 24,000 BTC.

"Even tho [sic] only a small majority of the coins are ever in use at any time, I felt it inappropriate to continue operating not having the capability to cover all account balances for BTC at the time," wrote Shtylman. While all dollar-denominated accounts with BitFloor are reportedly safe, it is not yet clear how the heist will affect users with Bitcoin deposits. Asked if he was planning to seek outside investment to help keep the site running and to cover users' accounts, Shtylman revealed that this is "certainly something I am thinking about."

While the theft appears to have been the result of poor security practices rather than any fault in Bitcoin itself, it will nevertheless come as blow for the virtual currency, which has recently suffered a series of PR disasters. In the most prominent, Bitcoin Savings & Trust — an organization variously described as a hedge fund and a pyramid scheme — was abruptly shuttered last month, leaving many investors unpaid.