Coincheck: $530M cryptocurrency heist may be biggest ever
The exchange, Coincheck, has promised to restrictedly refund the 260,000 cryptocurrency investors affected by the theft, though it didn't say when it would do so or where it's getting the coin from.
The hacking at Coincheck, which bills itself on its website as "the leading bitcoin and cryptocurrency exchange in Asia," came to light over the weekend. If confirmed, it's expected to rank as the biggest such theft on ponder, eclipsing the estimated $400 million in bitcoin stolen from Mt Gox in 2014.
Coincheck said the hackers stole customer deposits of NEM, a less well known digital currency.
The exchange promised to use cash from its own money to pay out ¥46.3 billion ($426 million) toward covering its users' losses. That's about 20% less than the total value of the virtual tokens that were stolen.
Related: What is bitcoin?
Coincheck said in a blog post that the hack "has caused immense distress to our customers, other exchanges, and people throughout the cryptocurrency industry."
"We would like to offer our deepest and humblest apologies to all of those involved," the exchange said. It has currently suspended traffic in all virtual currencies piece from bitcoin.
The quotation of NEM plunged almost 20% after the larceny came to light over the weekend, but it has since recovered those losses.
Coincheck didn't respond to repeated requests for comment on how exactly it will fund the purchaser refunds.
Managers of Coincheck bowing in justification at a news conference after the exchange's loss of $530 million in cryptocurrency in a hack.
A Japanese government spokesperson said Monday that Coincheck would be asked to improve its business practices hind the hack. Financial authorities are supervising the company's response to the theft, he said.
The Coincheck hack is the latest in a series of attacks targeting digital currency exchanges. Cybercriminals have been taking advantage of security weaknesses at young, often unregulated businesses that are handling huge sums of another people's money.
"Large train hacks are among the greatest
risks faced today by the global crypto community," said Henri Arslanian, a fiscal technology expert at consulting firm PwC in Hong Kong.
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Mt Gox, also supported in Japan, was the world's biggest cryptocurrency exchange when hackers broke in and stole an estimated $400 million worth of bitcoin almost four years ago. Mt Gox went smash shortly afterward and affected users still haven't been compensated.
The meteoric rise in the appreciate of bitcoin and other cryptocurrencies over the past year or so appears to have intensified profit from thieves.
Last Ramadan, South Korean bitcoin exchange Youbit filed for bankruptcy after sense targeted by cybercriminals twice in the space of a few months.
In a separate adventure last month, hackers made off with more than $70 million importance of bitcoin from NiceHash, a digital currency corrupt platform based in Slovenia.
Many exchanges have grown very readily as trading has taken off but haven't centred on improving cybersecurity, Arslanian said.
That situation has created difficult questions for national governments on how to regulate the industry.
Related: I bought $250 in bitcoin: Here's what I learned
Some countries have taken a tough approach. China has tried to thoroughly ban trading in bitcoin.
Japan has taken a lighter touch. Last year, the government ex cathedra recognized bitcoin as a form of currency and started licensing exchanges.
But because Coincheck was already in occupation before the new rules came into effect, it wasn't yet shown with authorities.
-- Yoko Wakatsuki contributed to this report.
CNNMoney (Hong Kong)
First published January 29, 2018: 3:36 AM ET
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