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They had their servers compromised last year: https://bitcointalk.org/index.php?topic=105818.0 https://bitcointalk.org/index.php?topic=105818.0

makomk 14y ago
Did they ever manage to pay out the funds users had on the site at the time? Last I heard, they'd decided to solve the problem by freezing all those funds and gradually releasing them as they earned enough money on trading fees to actually repay people.
- bcoates 14y ago
  This makes me wonder if they had taken their user dollar accounts and bought bitcoins with them to try and make up for the shortfall, then were impossibly wiped out by the crash.
- slg 14y ago
  It is a little ironic consider one of the often trumpeted benefits of Bitcoin is a limited money supply and lack of a fractional reserve system. The truth of the matter is that Bitfloor was under no restrictions whatsoever on how much USD/Bitcoin it needed to have on hand in the event of something like this.
  - jzwinck 14y ago
    The theft from Bitfloor was roughly half the total assets (most of the BTC, none of the USD) at the time. A fractional reserve of 50% is still many times higher than what you'll find if you look in the vault of any regular bank in the US.
    - slg 14y ago
      That might be true, but the fact is that Bitfloor wasn't required to have anything on hand. Their reserve might have been 50% in that instance, but customers are putting their faith in Bitfloor to responsibly set and maintain a reasonable reserve rate. I find it ironic that people who distrust their local banks and government to that extent will put that much faith into a Bitcoin exchange.
      - khuey 14y ago
        On the other hand if bitfloor had no reserves you couldn't steal from them.
    - illuminate 14y ago
      You can "carry" out a great much more from a theft of virtual money than you can at any brick and mortar bank. A million dollars in bitcoin wallets versus ten thousand heavy, bulky dollars.
- jzwinck 14y ago
  They posted in December (https://plus.google.com/109620439233076225324/posts/YjFo5kgEJZK https://plus.google.com/109620439233076225324/posts/YjFo5kgE...) that 1.7% of the stolen funds had been repaid out of their own revenue, and that it would continue. At the time it had only been 2-3 months since the theft, and it's been a few months since then. So people got some back (at Bitfloor's expense, unfortunately, rather than the thief's).

makomk 14y ago

Did they ever manage to pay out the funds users had on the site at the time? Last I heard, they'd decided to solve the problem by freezing all those funds and gradually releasing them as they earned enough money on trading fees to actually repay people.

bcoates 14y ago
This makes me wonder if they had taken their user dollar accounts and bought bitcoins with them to try and make up for the shortfall, then were impossibly wiped out by the crash.
slg 14y ago
It is a little ironic consider one of the often trumpeted benefits of Bitcoin is a limited money supply and lack of a fractional reserve system. The truth of the matter is that Bitfloor was under no restrictions whatsoever on how much USD/Bitcoin it needed to have on hand in the event of something like this.
- jzwinck 14y ago
  The theft from Bitfloor was roughly half the total assets (most of the BTC, none of the USD) at the time. A fractional reserve of 50% is still many times higher than what you'll find if you look in the vault of any regular bank in the US.
  - slg 14y ago
    That might be true, but the fact is that Bitfloor wasn't required to have anything on hand. Their reserve might have been 50% in that instance, but customers are putting their faith in Bitfloor to responsibly set and maintain a reasonable reserve rate. I find it ironic that people who distrust their local banks and government to that extent will put that much faith into a Bitcoin exchange.
    - khuey 14y ago
      On the other hand if bitfloor had no reserves you couldn't steal from them.
  - illuminate 14y ago
    You can "carry" out a great much more from a theft of virtual money than you can at any brick and mortar bank. A million dollars in bitcoin wallets versus ten thousand heavy, bulky dollars.
jzwinck 14y ago
They posted in December (https://plus.google.com/109620439233076225324/posts/YjFo5kgEJZK https://plus.google.com/109620439233076225324/posts/YjFo5kgE...) that 1.7% of the stolen funds had been repaid out of their own revenue, and that it would continue. At the time it had only been 2-3 months since the theft, and it's been a few months since then. So people got some back (at Bitfloor's expense, unfortunately, rather than the thief's).