Tokyo-based Exchange Coincheck Victim of Hacking, Loses Above $500 Million of Crypto Coins

It has not been a great month for crypto enthusiasts and investors as the market has reacted negatively this month. A huge correction has been witnessed in the overall crypto markets with Bitcoin and other cryptocurrencies correcting considerably owing to regulatory measures being brought by the South Korean government.

Just when the crypto market was trying to settle with these issues, adding salt to the wound was one more news coming from the most crypto friendly nation ‘Japan’. This Friday, Tokyo-based exchange ‘Coincheck’ confirmed that it has become the latest victim of crypto hacking and lost a whopping over $500 million in crypto coins.

During a press conference, Coincheck’s chief operating officer Yusuke Otsuka said that the loses measured to an estimated 58 billion yen which translates to approximately $533 million. As reported by Bloomberg, around 500 million NEM tokens were being stolen and Otsuka said that the company is taking every measure to ensure the safety of its client’s assets.

Once getting aware of this matter, the firm immediately suspended trading activities for all coins on its platform and also stopped deposits into NEM coins. During a late-night press conference at the Tokyo Stock Exchange, Otsuka said: “We know where the funds were sent. We are tracing them and if we’re able to continue tracking, it may be possible to recover them. But it is something we are investigating at the moment.”

On it'd official blog post, Coincheck wrote: “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. We sincerely apologize for the inconvenience this has caused everyone.”

However, no issues were reported on the NEM blockchain on which the XEM tokens which were hacked are traded. While talking to CoinDesk, NEM President, Lon Wong confirmed that there have been no issues reported with the network. Wong said: “As far as NEM is concerned, tech is intact. We are not forking. Also, we would advise all exchanges to make use of our multi-signature smart contract which is among the best in the landscape.”

This hack gets registered as one of the biggest hacks and even bigger than Mt. Gox which reported losses of around $340 million. Everyone in Japan’s crypto market was shocked at the occurrence of the event and Japan’s Financial Services Agency said that it is “looking into the facts surrounding Coincheck.”

Last year, Japan announced licensing crypto exchanges and the ones with credible operations were only allowed to function. Such a hack might make Japanese government revise or recheck its licensing policy again.

Marc Ostwald, the global strategist at ADM Investor Services International in London, said: “Japan is one of the most pro-crypto trading countries, among the G-20. In Japan, they don’t really want a wholesale clampdown. So it will be interesting how Japanese regulators respond to this, if they indeed do."