Coincheck hack leads to theft of $530 million worth of NEM

One of Japan’s largest cryptocurrency exchange Coincheck was hacked and an estimated $530 million worth of NEM was stolen.

The security breach of one of Japan’s largest digital exchanges has led to fears within the cryptocurrency world similar to those observed during the downing of the Mt. Gox exchange four years ago. Soon after the theft was detected, value of NEM dropped 14 per cent to $.81 cents and along with it other major cryptocurrencies also went down – Bitcoin was down by as much as 4 per cent while Ripple saw a decline in its prices by over 10 per cent.

Officials at the cryptocurrency exchange say they aren’t aware of how $530 million worth of NEM coins went missing and that they are currently working to ensure the safety of client assets. In the press conference that the cryptocurrency exchange officials had organized, the CEO didn’t speak much about security weaknesses and when probed, all he did was apologize about the hack. He didn’t shown any admission of guilt or weakness.

Coincheck issued a series of tweets before the press conference, saying: “We have suspended the deposit, withdrawal, buying and selling of NEM. We’re sorry for causing you great inconvenience and making you worry.” It also announced that it had suspended trading for all cryptocurrencies apart from Bitcoin: “Currently we’re suspending the buying and selling of altcoin except for BTC. We’re sorry to cause you great inconvenience. Thank you for your understanding.”

This is not the first time that a cryptocurrency exchange has been hacked. Outages and security breaches are fairly common this the cryptosphere amid the trading boom that propelled Bitcoin and its peers to record highs last year. Like Bitcoin, NEM is a cryptocurrency built on top of blockchain technology, but it uses a more environmentally friendly method to confirm transactions, according to its website. Bitcoin mining, on the other hand, requires significant computing power.

Japanese exchanges started cropping up last fall, as the government gave its blessing for fully compliant markets. But as the case of Coincheck shows, those markets are still vulnerable to attacks, and Coincheck has yet to receive a license, according to the website of Japan’s financial regulator. Coincheck, founded in 2012, is headquartered in Tokyo’s Shibuya district, an area popular with start-ups that was also home to Mt. Gox.

Richard Newman

Richard is the Editor-in-chief of Bitcoin Journal. He has over 10 years of experience with the news industry mainly handling the editorial cycle.

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