CoinEX.pw hacked, all funds lost

As the major exchanges ramp up their security efforts in response to the transaction malleability attacks that took down Mt.Gox, several smaller exchanges with less development resources have found themselves targeted. The most recent case involves CoinEX.pw, based (for tax purposes, at least) in the Pacific island nation of Palau.

CoinEX is a small exchange handling bitcoin and a variety of alt-coins, but the overall volume at the exchange is small when compared to most exchanges. Average volume at the exchange generally ranges under 5,000 BTC per day. There has been no official announcement of losses, but owner Vitaly A. Sorokin (known by the handle erundook) has suggested a full announcement about the hack and CoinEX’s response will be released tomorrow.

This isn’t the first time CoinEX has been hacked, and just like the last time erundook expects to cover the losses from his own pocked. Posting on the BitcoinTalk forum, Sorokin noted:

Long story short: yes, our wallet server got hacked and all funds were withdrawn. … Please read back to the beginning of this thread, we had such a problem before and *returned all the stolen funds from our own pockets*. Before this hack happened, we also had several attacks that lost funds and we silently covered those from our fees. … So again, please calm down. We are not doing a runner. … Long story short, we’re covering this from our own pockets again.

In later announcements, Sorokin suggested the need for a form of insurance in the bitcoin community. That idea, once seen as the antithesis of the bitcoin philosophy, seems to be gaining popularity.