Come on! How does a malleability attack steal their all coins 'SLOWLY' and they don't notice it until all of them are gone?
They stole the coins themselves and took advantage of the malleability situation as an excuse.
Ok, I'll bite. In this scenario there are two ledgers. One is the bitcoin block chain and the second is SR2 escrow service.
The interacton/use case goes like this:
1) Vendor A withdraws some money........
......What SR2 is talking about in the sad message)
Thanks for the detailed explanation. Much appreciated!