Money

Coincheck to Reimburse Customers $400 Million Stolen by Hackers

January 29, 2018 07:27·
Coincheck President Koichiro Wada

Coincheck President Koichiro Wada

Tokyo-based Coincheck on Friday suspended trading in all cryptocurrencies except bitcoin after the theft of NEM coins in one of the biggest-ever losses of digital money to hackers.

Bitcoin traded Sunday around 11,650 dollars.

"We realize that this illicit transfer of funds from our platform and the resulting suspension in services has caused vast distress to our customers, other exchanges, and people throughout the cryptocurrency industry, and we would like to offer our deepest and humblest apologies to all of those involved", Coincheck said in a statement.

The company said it discovered unusually large withdrawals of NEM early Friday local time but couldn't say yet from which country or countries the unauthorized access came, according to the Journal.

Coincheck management said in a press conference last week that it held the NEM coins in a "hot" wallet, referring to a method of storage that is linked to the internet - a method that was "not industry standard", according to Colas.

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Coincheck has announced that it will issue a full refund to all of the 260,000 clients who lost their NEM holdings due to the hacking incident that took place in the exchange.

Coincheck's CEO Yusuke Otsuka told the Tokyo Stock Exchange that it's possible to trace where the NEM was sent after it was illegally accessed.

The financial watchdog is also considering administrative punishment for Coincheck under the financial settlements law, one of the sources said. Asked why, company President Koichiro Wada cited technical difficulties and a shortage of staff capable of dealing with them.

The Coincheck incident marks the biggest-ever theft of digital money in the nine-year history of virtual currencies, topping the heist at Japan's Mt. Gox exchange almost four years ago. Those coins were reportedly worth approximately 58 billion yen ($534.8 million) when the hack was detected.

More importantly, the exchange has confirmed that it will continue to stay in the business and will not file for bankruptcy.

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