Japanese Exchange Loses Record $530 Million in Cryptocurrency

Sunday, 28 Jan, 2018

The Tokyo-based exchange said in a statement it would reimburse the 260,000 customers affected by the $400 million heist of digital currency NEM, "at a rate of 88.549 yen (81 USA cents) for each coin", Bloomberg News reported. What started on Friday as a freeze of NEM deposits quickly spread to other altcoins and withdrawals.

This would make this the largest hack of cryptocurrency yet - breaking the previous record set by Mt.Gox of $340 million. Estimates indicate that over $530 million in digital currency may have been stolen or about 58 billion yen of the virtual currency.

After suspending withdrawals and then halting trading, the exchange said it has also stopped deposits into NEM coins.

Wong said it has nothing to do with NEM and its particular a fault for Coincheck.

The price of NEM has plunged 15%, even though the security flaw lies entirely with Coincheck.

The exchange posted several updates in a blog post and that announced that "certain Coincheck Payment features will be temporarily unavailable starting at 5 pm JST on 1/27/2018". Just recently a popular cryptocurrency exchange based in Japan, Coincheck has claimed that it has lost over $400 million in tokens after a hacking attack hit its service.

Finally, the hack of Nicehash, a bitcoin mining pool, in December 2017, was the most recent major theft of cryptocurrency before the Coincheck breach today.

We sincerely apologize for the inconvenience this has caused everyone. Trading has also been halted for all cryptocurrencies, expect bitcoin.

Co-founder Yusuke Otsuka said the company didn't know how the 500 million tokens went missing, and the firm is working to ensure the safety of all client assets.

Soon after the company began shutting down operations, $123 million worth Ripple coin was transferred to another wallet.

If you are among those affected by the heist, you can calculate your due amount using the following simple formula: compensation due = 88.549 yen * number of NEM you lost.

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.