Bitcoin, Cryptocurrency And Blockchain News

Coincheck Prepares to Return NEM Coins After Cyber Attack


Cryptocurrency wallet and exchange, Coincheck, have released an official announcement stating that they will restore stolen tokens from the recent hack “by the end of the next week”. The exchange lost $534 million’s worth of NEM in the cyber attack in January 2018. The president of NEM Foundation, Lon Wong, called it “the biggest theft in the history of the world.” The services of Coincheck will be available as soon as refunding is completed.

Prior to the hack, the exchange was storing NEM coins in a hot wallet, while the rest of the cryptocurrencies were stored in a multisig. Once the hackers stole the private key, they were then able to get away with 523 million NEM. Fortunately, the other cryptocurrencies remained safe during the attack. Coincheck immediately halted further transactions and withdrawals as per a blog post, “All withdrawals from the platform are currently restricted, including JPY. Thank you for your understanding. We are doing our utmost to resume normal operations as soon as possible.”

Some of the tokens were found by a forensics firm at an exchange in Canada this week. However, Japanese Financial Services Agency (FSA) presented “business improvement orders” to seven exchanges including Coincheck on March 7th. Two of these exchanges, Bit Station and FSHO, have been suspended for a month – the former consisting of a senior level employee, who used BTC from customers for his personal use. Coincheck is under scrutiny for its lack of “a proper internal control system for risks such as money laundering and terrorism financing.”

In response to the orders and the hack, Coincheck issued an apology on its website.

We would like to offer our sincerest apologies to our customers, other exchanges, and everyone else affected by the illicit transfer of NEM which occurred on our platform.

We vow to take action on all of the points listed in the business improvement order handed down from the Financial Services Agency as we work towards resuming normal business operations.

Currently, we have suspended various features on our platform including new registrations.

Thank you for your patience and understanding.

The CEO of Coincheck, Koichiro Wada, also talked about improving the security of the exchange “by external expert institutions concerning financial systems security and cyber security.”