Coincheck: World's biggest ever digital currency 'theft' | 2018-01-28 |

Coincheck: World's biggest ever digital currency 'theft'

Sun Online Desk     28th January, 2018 01:26:41 printer

Coincheck: World's biggest ever digital currency 'theft'


One of Japan's largest digital currency exchanges says it has lost some $534m (£380m) worth of virtual assets in a hacking attack on its network.


Coincheck froze deposits and withdrawals for all crypto-currencies except Bitcoin as it assessed its losses in NEM, a lesser-known currency.


It may be unable to reimburse the funds lost on Friday, a representative told Japanese media.


If the theft is confirmed, it will be the largest involving digital currency.


Another Tokyo exchange, MtGox, collapsed in 2014 after admitting that $400m had been stolen from its network.


The stolen Coincheck assets were said to be kept in a "hot wallet" - a part of the exchange connected to the internet. That contrasts with a cold wallet, where funds are stored securely offline.


Coincheck says it has the digital address of where the assets were sent.


What do we know about the hack?


Hackers broke in at 02:57 on Friday (17:57 GMT Thursday), the company said in a statement, but the breach was not discovered until 11:25, nearly eight and a half hours later.


Company chief operating officer Yusuke Otsuka said 523m NEMs had been sent from Coincheck's NEM address during the breach.


"It's worth 58bn yen based on the calculation at the rate when detected," he told reporters at the Tokyo Stock Exchange.


Coincheck was still examining how many customers had been affected and trying to establish whether the break-in had been launched from Japan or another country.


"We know where the funds were sent," Mr Otsuka added. "We are tracing them and if we're able to continue tracking, it may be possible to recover them."


Coincheck reported the incident to the police and to Japan's Financial Services Agency.


What is Coincheck?


Founded in 2012, the company is based in Tokyo, where it employed 71 people as of August last year.


Its headquarters are located in the city's Shibuya district, an area popular with start-ups that was also home to MtGox, Bloomberg reports.


Last year, Coincheck began running adverts on national television featuring popular local comedian Tetsuro Degawa, the agency adds.


Kunihiko Sato, a 30-year-old customer from Tokyo, told Kyodo he had deposited about 500,000 yen ($4,600), into his account with the exchange.


"I never thought this kind of thing would happen with Japan's developed legislation," he said, reports BBC.