$530 million lost in hack of Japan cryptocurrency exchange

Ashley Carr
January 28, 2018

One of Japan's largest digital currency exchanges, Coincheck, has apologised to investors for losing up to 420 million euro in virtual money.

Depositing NEM on Coincheck is now being restricted.

Regardless of the official tally, it's a major theft, surpassing the ~$340 million that was famously stolen from Mt. Gox in 2014.

This time the heist affected only NEM [coin symbol XEM] cryptocurrency, which is now the 10th largest virtual currency to CoinMarketCap.

Since the heist, Coincheck has stopped trading in all tokens except Bitcoin, as the company says that it doesn't know how the NEM tokens were taken (sounds like a hack to us). NEM, the tenth largest cryptocurrency based on total coin market cap, is a distributed ledger platform primarily aimed at enabling payments and other financial services.

Coincheck officials are now pondering a method of compensating some of the users who suffered losses, according to a user who live-tweeted the Coincheck conference [1, 2]. Only Bitcoin services remained available on the exchange.

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Coincheck has fallen victim to a hack attack that reportedly stole more than $400 million worth of cryptocurrencies. "We are doing our utmost to resume normal operations as soon as possible", said a blog post from Coincheck. Unlike Bitcoin, NEM is not mineable-all of the XEM was created at the start and distributed to investors.

Over the next hour, all cryptocurrency trading was restricted with the exception of bitcoin.

All told, about 500 million XEM tokens, worth roughly $420 million, was stolen from Coincheck, according to Bloomberg. Because the suspension was given no explanation and the money wasn't transferred to any other exchange, this led many to believe that someone may have hacked Coincheck.

Coincheck have said the currency was sent "illicitly" outside the venue.

Coincheck had applied with the agency for a license as an exchange and was able to continue operating under the FSA's rules while awaiting a decision.

Another difference is that the Coincheck customers have some hope of being repaid, whereas most of the bitcoins stolen from Gox were never recovered and its users were not made whole.

Other reports by My Hot News

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