JAPANESE CRYPTOCURRENCY EXCHANGE Coincheck has admitted the loss of $533m in NEM tokens from its digital wallets after falling victim to the biggest cryptocurrency hack to date.
The company admitted the catastrophic hack at a press conference at 11.30pm on Friday in Tokyo. Coincheck president Wakata Koichi Yoshihiro and chief operating officer Yusuke Otsuka said that 523 million NEM tokens were stolen from digital wallets, a loss it estimated at ¥58bn ($533m).
However, the losses could be even bigger: Japanese newswire Nikkei has indicated that the organisation will need to make further checks to quantify exact losses.
The value of XEM, the cryptocurrency protocol that Coincheck NEM tokens are based on, plunged following the news - ironically, reducing the losses to 'only' about $400m.
The admission late this evening followed mounting speculation after Coincheck suddenly and unexpectedly suspended services.
"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," the curt Coincheck statement advised.
It was later updated to announce even further restrictions, including Japanese Yen withdrawals, purchases and sales of other cryptocurrencies and card payments.
The company also revealed during its press conference that it was not registered with Japan's Financial Services Agency, according to specialist website Coindesk, but that added that it now plans to do so - although its survival must surely now be open to question.
Since Friday's announcement, Coincheck has said it will use its cash to reimburse about ¥46.3bn to the 260,000 people who lost their holdings of NEM.
So far, there hasn't been any speculation over who might have been behind the attack, but North Korea is known to have taken a strong interest in hacking cryptocurrencies as a means of raising foreign exchange.
In 2016, it was connected with an audacious attempt to steal $951m from Bangladesh Bank, the central bank or Bangladesh, in a cyberheist via the SWIFT global payments system. The theft was only stopped by chance after a bank clerk questioned a basic spelling error in one of the payment transfer requests.
North Korea has also been linked with the WannaCry ransomware outbreak in May last year. µ
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