Cryptocurrency Theft Feared After Japan Exchange Halts Altcoin Trades

Robyn Valdez
January 28, 2018

One of Japan's largest digital currency exchanges, Coincheck, has apologised to investors for losing up to 420 million euro in virtual money. What started on Friday as a freeze of NEM deposits quickly spread to other altcoins and withdrawals. Shortly after it discovered the theft, the exchange suspended trading of NEM, the stolen crypto in question, then of the other dozen coins it lists.

Coincheck says that it has restricted deposits and withdrawals for a cryptocurrency called NEM, and Bloomberg reports that 500 million NEM tokens have been sent from the company "illicitly", and that it's not sure how.

The theft of the massive number of NEM tokens has affected the cryptocurrency market and NEM's value tumbled 11% over a 24-hour period to 87 cents per token. Coincheck had applied for a license but it is now waiting for a decision. Only Bitcoin services remained available on the exchange.

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The heist awakened memories of the notorious hack of Japanese cryptocurrency exchange Mt Gox in 2014, which resulted in more than 850,000 bitcoin being stolen from the now defunct exchange.

It's important to note that Coincheck is not registered with the Financial Services Authority of Japan which is the regulator that controls exchanges in the company. While that may be peanuts compared to the 30 trillion yen or so once held by Bitcoin, the largest of any digital currency, NEM was popular with individual investors.

The exchange's president said he "deeply regretted" what happened.

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Cryptocurrency exchanges are central targets for criminal activity right now, especially since bitcoin reached exponential heights at the end of past year. Kaspersky Lab's Costin Raiu said there was a transfer of $110 million worth of Ripple out of Coincheck, adding "hacking suspected". We are tracing them and if we're able to continue tracking, it may be possible to recover them. Many of these platforms are not regulated but multiple thefts have caught the attention of authorities around the world. An earlier hack, a comparatively modest 1,500 bitcoins, in May 2015 lost $350,000 in user funds.

Following the breach, Coincheck put a halt on NEM trading, followed by a restriction on purchases and sales of all digital currencies, save for Bitcoin.

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Other reports by Info About Network

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