Saturday, 17 February, 2018

Hackers stole $400 million worth of crypto coins from Coincheck

Hacked Tokyo cryptocurrency exchange to repay owners $425 million Crypto market falls as Coincheck halts withdrawals
Nellie Chapman | 27 January, 2018, 15:02

The largest cryptocurrency theft up until this point was the Mt. Gox one in 2014 that amounted to $340 million, but that one had a larger impact on the industry as the market cap is much higher now than it was then.

NEM, the 10th-largest cryptocurrency by market value, fell 14 per cent to 81 U.S. cents in the 24 hours through 10:07am.

"At 3 am (1800 GMT) today, 523 million NEMs were sent from the NEM address of Coincheck".

In a blog post at 12:07 p.m., customers were notified that their NEM deposits had been suspended and that they would be updated when more information became available. Wong also rejected a suggestion that the company should fork its NEM blockchain to freeze the stolen funds.

This news comes as a bit of a shock to investors as CoinCheck is said to be the largest cryptocurrency exchange in Japan.

The trade freeze looks to be tied to NEM, which consequently saw the following message sent out to users on the exchange: "Depositing NEM on Coincheck is now being restricted".

Coincheck CEO Koichiro Wada and Chief Operating Officer Yusuke Otsuka said it is so far unclear who was responsible for the hack, how it was perpetrated and what damage has been done.

Company officials said during a late night press conference at the Tokyo Stock Exchange that they didn't know how the 500 million NEM coins went missing, but they're working to ensure the safety of all client assets.

Billionaire investor George Soros, known for his legendarily successful currency trading, has dismissed bitcoin as a "typical bubble".

Otsuka said Coincheck is considering compensating clients if it can not recover the tokens but declined to say whether Coincheck had enough cash to do so.

"Taking security measures yields no clear benefit in terms of attracting customers", and so many exchanges "have been lax" on that front, according to Takenori Kiuchi, a cybersecurity expert at NRI Secure Technologies.

For instance, Coincheck's website says that bitcoins are to be stored offline when they are not being traded.

The value of XEM, the cyrptocurrency protocol that Coincheck NEM tokens are based on plunged following the news - ironically, reducing the losses to "only" about $400 million. Coincheck thusly limited withdrawals of all monetary forms, including yen, and exchanging of digital forms of money other than bitcoin.