$530M NEM Stolen Following Japanese Cryptocurrency Exchange Hack

$530M NEM Stolen Following Japanese Cryptocurrency Exchange Hack

$530M NEM Stolen Following Japanese Cryptocurrency Exchange Hack

The Japanese cryptocurrency exchange Coincheck has been robbed of around 500 million NEM tokens in one of the largest heists the space has ever seen. Coincheck was founded in 2012 by James Riney, Koiichiro Wada, and Yusuke Otsuka and is based in Tokyo.

The Financial Services Agency has required virtual exchanges to be registered since last October, to protect consumers.

A statement on the company's website says that the funds were "illegally" transferred away from the platform, but that the culprit and their methods have yet to be identified.

It's also been reported by CoinTelegraph that Coincheck didn't store its NEM in a more secure multi-signature wallet, opting instead for a simpler single-signature wallet setup.

Japanese exchange Coincheck said it will use its own capital to reimburse all customers who had cryptocurrency NEM stolen on Friday. Following this, Coincheck halted their operation announcing, "sales and purchase of altcoin are being restricted".

The hack is one of the biggest ever, nearly matching the $500 million loss from the Mt. Gox exchange in 2014.

NEM is a virtual currency launched in March 2015. Coincheck applied for the registration in September a year ago and the agency is still examining its application. "They were very relaxed with their security measures", Wong said.

For Bitcoin investors, the good news was that Bitcoin was able to close out the week holding on to $11,000 levels, in spite of the Cboe's February contract ending the day down 2.83% to $10,980.

"(Coincheck) needs to tell us what is happening now", he said before the news conference got underway.

Another Tokyo exchange, MtGox, collapsed in 2014 after admitting that $400m had been stolen from its network. "I think that the fact that the crypto markets are sort of being resilient in the face of the potentially biggest hack on one of the crypto exchanges is pretty interesting".

But Coincheck is doing business in the meantime as a quasi-operator.

According to cryptocompare.com, bitcoin's trading volume in yen accounted for roughly 30 to 40 percent of the global total in the past month.

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