Another Cryptocurrency Exchange Hack Sees Theft of $530 Million

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A major Japanese cryptocurrency exchange has been hacked into, losing some 58 billion yen ($534 million) in what could very well be the biggest hack in the history of cryptocurrencies.

According to local news source Asahi, Tokyo-based cryptocurrency exchange Coincheck has confirmed that some 500 million NEM tokens, worth about 58 billion yen at the time ($533 million) were taken from Coincheck’s online wallets on Friday.

Appearing at a news conference, the exchange’s president and chief operating officer confirmed the exchange was looking into compensating its users.

The exchange abruptly froze much of its services early on Friday, including withdrawals that sparked off rumors about a possible breach. At 04:00 UTC, the exchange had restricted deposits, trading and withdrawal of NEM’s cryptographic token XEM. Within 30 minutes, the suspension spread to withdrawals of all cryptocurrencies as well as Japanese yen. An hour later, trading of all cryptocurrencies, except bitcoin, had stopped.

The exchange has reported the incident to police as well as Japan’s Financial Services Agency (FSA), the country’s financial  regulator. Perhaps notably, Coincheck wasn’t registered as a licensed exchange under the FSA but claims it plans to do so now.

In translated comments, FSA officials stated:

“We will report on the damage situation and cause of the case, measures to prevent recurrence, but first we would like you to take every possible measures to protect our customers.”

The value of the hack now exceeds that of Tokyo-based Mt. Gox, once the world’s largest cryptocurrency exchange with some 80% of the world’s trading. In 2014, the exchange filed for bankruptcy after losing 850,000 bitcoins, worth around $450 million dollars at the time, along with $28 million in cash from its bank accounts.