[2018-01-26]Coincheck Confirms Crypto Hack Loss Larger than Mt Gox

[vit05]

Tokyo-based cryptocurrency exchange Coincheck has confirmed that it has suffered what appears to be the biggest hack in the history of the technology.

In a press conference at 23:30 JST (14:30 UST), the exchange's president Wakata Koichi Yoshihiro and chief operating officer Yusuke Otsuka estimated its loss at 58 billion yen (approx. $533 million). According to Bloomberg, which attended the conference, 500 million NEM tokens were taken from Coincheck's digital wallets.

Tweets by Nikkei appeared to indicate that the precise amount stolen may not be fully known until further checks have been carried out into the intrusion.

But though the exact dollar figure for the incident is hard to pin down (given the volatile nature of cryptocurrencies and the company's lack of information), data suggests the figure is now at least over $400 million, factoring for a decline in the value of XEM, the NEM protocol's token, following the incident.

At press time, the price of XEM was $0.85, down from a high of $1.01 today, according to data from Coinmarketcap.

Notably, the dollar amount stolen from Coincheck is likely greater than the amount stolen from Mt. Gox in 2014 (pegged at $340 million), though the impact on the cryptocurrency market will be much smaller given the immense increases in market capitalization since.

Rumors had been circulating about the theft since early this morning when Coincheck abruptly froze most of its services.

The firm announced on its website around 13:00 JST (04:00 UTC) that it had restricted deposits, trading and withdrawal of XEM, the token running on the NEM blockchain.

A wider suspension on withdrawals of all cryptocurrencies as well as Japanese yen was announced around 30 minutes later. In the following hour, trading of all cryptocurrencies was also restricted, except bitcoin. According to the latest update, other deposit methods including credit cards have also been stopped.

Coincheck is looking into compensating its customers, its executives also announced.

It was also revealed that Coincheck was not registered with Japan's Financial Services Agency, but now plans to do so. Coincheck's president said he "deeply regretted" the issue.

https://www.coindesk.com/coincheck-confirms-crypto-hack-loss-larger-than-mt-gox/?utm_content=buffer6920e&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

[hatshepsut93]

Even though this hack if bigger than Mt.Gox, it represents only a tiny fraction of cryptocurrency marketcap, so there won't be any big price crashes - plus people kinda got used to exchanges being hacked frequently, so it wasn't unexpected.
Also this is another good reason to support development of decentralized exchanges - after all, cryptocurrencies are programmable money, and it would be a waste to not use their full potential.

[Haiduongbg]

NEM plummeted but made a quick recovery. I don't think it will have profound impact on the market maybe Japanese government will impose stricter regulations on crypto exchanges

[Paractor]

I saw the post of the companies twitter account of the before and after pictures of the two ceo and/or director of operations.
And it was like looking at night and day.
They looked very pale and wanted to just die right then and there with having lost this much money in crypto due to not securing their own website from hacks.

[Zicadis]

Just checked https://coinmarketcap.com/currencies/nem/ not much of a dip for nem after this incident, and I noticed that Coincheck is now looking into registering with Japan's Financial Services Agency...does this move in any way have benefits to the exchange like compensations to affected users etc 

[qwerty4]

The lack of multisig seems to be one of the reason of the incident.  The exchanges applying mutisig should be safer.

[darkangel11]

Not long ago there was a big Korean exchange hacked and apparently the hackers drained their hot wallets. On top of that those hot wallets held almost all the coins the exchange had. Wasn't that like a month ago? One could think other exchanges will learn to use cold wallets and employ some people to manually confirm transactions, but no. The withdrawals should be processed manually if that's what it takes.

[richardsNY]

That's what happens when a market grows too fast. Back in the days these hacks (let's assums it was a real hack for now) were pretty insignificant in terms of the lost coin value, but now everything is so pumped up, that basically even smaller hacks result in millions and millions of dollars worth of coin loss. It's called growing pains, but these growing pains have catastrophic consequences considering how much they are worth in current time and day. Yet again another alarm that should make people want to store their coins offline. Storing coins at whatever exchange or online wallet service for convenience purposes shouldn't be used as an excuse....

[RamonBTC]

If they’re not registered then they’re illegal in the first place, is this a cover up issue that this hacking is part of a plan before the controversial “I regretted” statements. I don’t want to accuse anyone but this scenario been used by many crypto companies to make them looks innocent in the eye of they’re investors. Is it an inside job or just a manipulated propaganda for corruption/illegal activity to hide the true perpetrators.

[Hell-raiser]

If they’re not registered then they’re illegal in the first place, is this a cover up issue that this hacking is part of a plan before the controversial “I regretted” statements. I don’t want to accuse anyone but this scenario been used by many crypto companies to make them looks innocent in the eye of they’re investors. Is it an inside job or just a manipulated propaganda for corruption/illegal activity to hide the true perpetrators.

I don't think they are not registered. Coincheck is located in Tokyo and Japan is known for their strict regulations in respect to cryptocurrencies. But regulation doesn't mean security, and people trading at any exchange should always remember that. Exchange account is not a substitute for personal wallet unless you are an active trader. Personally, I expected that Bitfinex hack in August 2016 would give a spur to the development of decentralized exchanges but it seems that we need a bit more than just a couple exchanges hacked or allegedly hacked.

[RamonBTC]

If they’re not registered then they’re illegal in the first place, is this a cover up issue that this hacking is part of a plan before the controversial “I regretted” statements. I don’t want to accuse anyone but this scenario been used by many crypto companies to make them looks innocent in the eye of they’re investors. Is it an inside job or just a manipulated propaganda for corruption/illegal activity to hide the true perpetrators.

I don't think they are not registered. Coincheck is located in Tokyo and Japan is known for their strict regulations in respect to cryptocurrencies. But regulation doesn't mean security, and people trading at any exchange should always remember that. Exchange account is not a substitute for personal wallet unless you are an active trader. Personally, I expected that Bitfinex hack in August 2016 would give a spur to the development of decentralized exchanges but it seems that we need a bit more than just a couple exchanges hacked or allegedly hacked.

From Op: “

It was also revealed that Coincheck was not registered with Japan's Financial Services Agency, but now plans to do so. Coincheck's president said he "deeply regretted" the issue.

” If this is not a straightforward confirmation from the president itself then it won’t be counted but it is as clear as a crystal. Even in a strict regulator like Japanese government can make a slight mistake and be fool by this company. This isn’t about what the traders attitude toward holding crypto on exchanges, it is a security problem that traders paid for in every transaction. So we can’t blame others than the management itself.