CoinCheck happens to be the largest cryptocurrency exchange in Japan and at the early morning of January 26th, the exchange was hacked. Most people have referred to it as the biggest theft in the world. Less than 4 years after the Mt. Gox hack where millions of BTC tokens were stolen, the CoinCheck hack has overtaken the Mt. Gox hack and has become the biggest crypto theft in the history of cryptocurrencies. The early hours of January 26, 2018, saw the Chief Operating Officer of the exchange announce that over 523 NEM tokens (an equivalent of $523 million) were transferred from the exchange. According to the Chief Operating Officer, the tokens were stored in a hot wallet and about 3 am it was transferred to a sperate wallet address. You would find it interesting to know that only NEM tokens were stolen. The exchange holds over a dozen cryptocurrencies and only NEM coins were transferred leaving the other cryptos untouched.
Image Source : https://coincheck.com/
The official statement released by the exchanges explained that the hackers got access to the private keys of the wallet in which the tokens were stored. This access to the private keys enabled them to drain all the coins on the wallet. Most if not all of the stolen tokens belonged to crypto investors who make use of the exchange. This hack was reported by the exchange to the financial agency of Japan as well as the police. Immediately after these tokens were transferred, the exchanged stopped all withdrawal to ensure that more damage is not done to the exchange. When the operating officer was asked if they could begin fiat currency withdrawal by reporters, he said that they would when they have decided on the best option or course to take.
After the hack, the exchange has been criticized by hundreds of people. Some are of the opinion that the exchange should not have stored the tokens in a hot wallet, that it should have been cold stored. Some have said that the exchange should have adopted certain safety measures and technologies like the multiple-signature wallet or the two-factor authentication system to ensure that the hackers did not get access to these tokens. In defense, the operating officer mentioned that the exchange had different storage and safety measures for each token it holds. According to the operating officer, other tokens on the exchange were stored using multiple signature wallets but the NEM tokens were not. To further defend the exchange, another statement was released to answer the critics, the statement announced that over 80% of the total staff of the exchange work on developing several systems including security systems as well.
The exchange has announced that it has tracked the address where the stolen tokens were transferred to and would stop at nothing to catch the culprits and see that they are brought to justice. Although the exchange has not disclosed the total number of accounts that have been affected by the hack, a promise has been made to refund all affected parties.
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Japanese cryptocurrency exchange Coincheck has announced it will be compensating customers that suffered losses in its January hacking. In addition, Coincheck has also reportedly decided to accept a takeover offer from Monex, Japan’s third-largest online brokerage.
Thanks for sharing. I've smashed the upvote button for you! Let's just hope they keep to their promise of refunding everyone!
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Here's hoping everyone gets their refund. Thanks for sharing this. .
All the patience in the world won’t help you if you are in what turns out to be a bad investment, on the contrary you should gtfo early.
Exchangers should really up their games to prevent such a thing from happening again. Hopefully, they'll catch those hackers and bring them to justice.