Over $400 Million Stolen From Hacked Japanese Cryptocurrency Exchange

Earlier today we reported that cryptocurrencies tumbled  overnight after one of the most popular, if unregistered, Japanese exchanges, Coincheck, halted withdrawals amid broad confusion as to what prompted the halt. Furthermore, Coincheck said it had stopped deposits into NEM coins, a hint that something fishy was taking place with the 10th-largest cryptocurrency by market value, which tumbled nearly 20% overnight, dragging the rest of the sector lower.

Speculation was rife: "Coincheck is a very well-known exchange in Japan," said Hiroyuki Komiya, Chief Executive Officer of Tokyo-based Blockchain Technology Consulting. "We’ve seen several outages at various crypto exchanges recently, so the extent and seriousness of Coincheck’s halt isn’t yet clear. We’re all very eagerly awaiting to hear more detail on what’s happening."

Shortly after the halt, theories started to emerge as to what may have happened, with some speculating that the exchange may have been hacked after noticing that a massive ($110 million) transfer from Coincheck's Ripple wallet:

110 mil usd in #Ripple (XRP) were sent from the Japanese cryptocurrency exchange Coincheck to an unknown address. Hacking suspected. https://t.co/hmGhlSmJEH

— Costin Raiu (@craiu) January 26, 2018

And then, the worst case scenario was confirmed by Coincheck itself told financial authorities that it had lost 500 million NEM cryptocurrency coins in today's cyberheist, which at the current exchange rate amounts to roughly $400 million!

While little additional information was available as of this moment, Coincheck added that the hacked NEM was sent illicitly outside exchange, at which point the trail was lost however "no other issues found with other currencies on exchange." Of course, the historic, nearly half a billion dollar hack is a big enough "issue."

The Japanese exchange also said that it was "working hard to secure client assets", and that it doesn't know how many total coins were lost, adding that it was not clear if NEM losses were internal or external.

And while memories of the historic Mt.Gox hack suddenly rush front and center, Coincheck said that it plans to start trading of unaffected currencies. In retrospect that may not be a good idea.