Coincheck lost $530 million worth of crypto coins to hackers

One of Japan’s biggest cryptocurrency exchanges, Coincheck, said it lost about $530 million in crypto coins to hackers. The coins were stolen via several unauthorized transactions from a hot wallet at 3:00 am local time on Friday, Jan. 26.  At around 3 a.m. Friday (local Japanese time), essentially all NEM,  a type of virtual currency, held by the Tokyo-based exchange was illicitly transferred out of its digital storage.

Coincheck discovered the breach after 11 a.m. local time, and soon stopped withdrawals in all currencies. Trading is on hold for all virtual currencies except bitcoin. In a Twitter post, the company said:

“Currently, buying and selling other than BTC (ortho coin) is temporarily suspended. We are sorry for your inconvenience, but we appreciate your understanding.
https: // coincheck.com/blog/4671 (translated from Japanese).”

現在、BTC以外（オルトコイン）の売買を一時停止しております。大変ご迷惑をおかけしてりますが、ご了承くださいますようお願い申し上げます。https://t.co/caNpzT88ZO https://t.co/awBB69xZcN

— Coincheck(コインチェック) (@coincheckjp) January 26, 2018

The exchange is currently investigating how many customers were impacted by the hack, and has said it is considering possible responses, including compensation for those whose NEM was taken. Coincheck managed its NEM accounts on systems vulnerable to hacking via external networks.

Coincheck “deeply regrets” the incident, CEO Koichiro Wada told reporters Friday night. The company “is currently determining what impact the breach will have on our finances,” said Yusuke Otsuka, chief operating officer. The theft has been reported to Japan’s Financial Services Agency as well as to police, and the exchange is urging its peers to halt trading in NEM. Lon Wong, president of the Nem.io Foundation created to promote the technology underlying NEM, wrote on twitter that “It’s unfortunate that Coincheck got hacked,” but said the foundation is “doing everything we can to help.”

On its blog site, Coincheck said:

Depositing NEM on Coincheck is currently being restricted. Deposits made to your account will not be reflected in your balance, and we advise all users to refrain from making deposits until the restriction has been lifted.  We sincerely apologize for the inconvenience this has caused everyone. Please follow the official Coincheck blog and our official social media accounts for updates.

Thank you.

Official Twitter account: https://twitter.com/coincheckjp

Following the hack, the Coincheck exchange has hosted a press conference to provide the details of what has happened and what’s coming next.

Coincheck is the leading bitcoin and cryptocurrency exchange in Asia. The company provides two-factor authentication (2FA) and cold storage. Coincheck is an online marketplace that enables its users to buy and sell cryptocurrency. The platform enables its users to buy and sell bitcoin, factom, xmr, fct, dao, and lsk with others. Coincheck was founded in 2012 by James Riney, Koiichiro Wada, and Yusuke Otsuka and is based in Tokyo.