At least $533 Million worth NEM stolen from Coincheck

January 27, 2018 by
Coincheck Hacked

Coincheck is a bitcoin wallet and exchange service that was first headquartered in Tokyo, Japan. As of last night, the exchange reported that a large sum of NEM was stolen by hackers. In what would be a hack bigger than Mt. Gox, the sum amount is believed to be big as $533 million. Coincheck has recently had that inappropriate transfer of $533 million worth of NEM to financial services authority and police. NEM, which is basically a peer-to-peer cryptocurrency that was launched on March 31st.

Thus after hearing such a bad loss of coincheck, Japan. NEM.io Foundation President Lon Wong also confirmed the hack, saying that 526 million XEM worth approximately $420 million as of this writing, had been stolen. After hearing such a loss, there was a simultaneous decrease in demand of Bitcoins. But soon after the rumour of hack was confirmed. After the confirmation, Joseph tweeted ” 58 million of Japanese yen and $530 million worth of NEM was stolen from coincheck.” In addition to the XEM theft, a second unauthorized transaction of more than 101.2 million XRP ($123.5 million) also reportedly took place, although it has not yet been confirmed whether that transaction was related to the XEM hack.

Recently, an accompanying blog post, “Depositing NEM on Coincheck is currently being restricted. Deposits made to your account will not be reflected in your balance, and we advise all users to refrain from making deposits until the restriction has been lifted.The restriction then spread to NEM sales and purchases, followed by withdrawals, before the exchange subsequently stopped all currency withdrawals, both crypto and fiat.”

A source stated: “Rumors are swirling that NEM wasn’t the only cryptocurrency stolen from Coincheck. Early on Friday morning on Twitter, Costin Raiu, head of Russian cybersecurity firm Kaspersky Labs global research and analysis team, called attention to a $110 million USD transfer of Ripple (another cryptocurrency) out of Coincheck.”

Our Take 

Coincheck is currently not registered with Japan’s financial services authority which is the main hub for controlling all the exchanges across the country.

Exchanges like coincheck, are thus primary targets for criminals to enter cryptocurrency world. This happens because they are the main access point for trading and often handle user funds or keep funds in reserve. The way to lower down such threats is only by increasing security measures.

From an implication standpoint, this hack is biggest than Mt. Gox but probably won’t have the same effect on the market. But it does make a strong case for decentralised exchanges. Let’s see how Coincheck handles this mishap.

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