Coincheck admits theft of $533m of cryptocurrency NEM – the biggest cyber theft in history

Incisive Business Media Limited.

Japanese cryptocurrency exchange Coincheck has admitted the loss of $533 million in NEM tokens from its digital wallets in a cyber theft that surpasses the Mt Gox collapse and which will go down in history as the biggest hack in history.

The company admitted the catastrophic hack at a press conference at 11.30pm today in Tokyo. Coincheck president Wakata Koichi Yoshihiro and chief operating officer Yusuke Otsuka said that 523 million NEM tokens were stolen from digital wallets, a loss it estimated at ¥58 billion ($533mn).

However, the losses could be even bigger: Japanese newswire Nikkei has indicated that the organisation will need to make further checks to quantify exact losses.

The value of XEM, the cyrptocurrency protocol that Coincheck NEM tokens are based on plunged following the news – ironically, reducing the losses to ‘only’ about $400 million.

The admission late this evening followed mounting speculation after Coincheck suddenly and unexpectedly suspended services.

“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,” the curt Coincheck statement advised.

It was later updated to announcement even further restrictions, including Japanese Yen withdrawals, purchases and sales of other cryptocurrencies and card payments.

The company also revealed during its press conference that it was not registered with Japan’s Financial Services Agency, according to specialist website Coindesk, but that added that it now plans to do so – although its survival must surely now be open to question.

So far, there hasn’t been any speculation over who might have been behind the attack, but North Korea is known to have taken a strong interest in hacking cryptocurrencies as a means of raising foreign exchange.

In 2016, it was connected with an audacious attempt to steal $951 million from Bangladesh Bank, the central bank or Bangladesh, in a cyber heist via the SWIFT global payments system. The theft was only stopped by chance after a bank clerk questioned a basic spelling error in one of the payment transfer requests.

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