Japan exchange Coincheck to refund customers £300m after crypto heist

A JAPANESE cryptocurrency exchange has agreed to refund hundreds of millions of pounds to customers whose investments were plundered in one of the world’s biggest ever high-tech heists.

Coincheck will use its own funds to pay back more than £300m to customers caught up in the theft on Friday.

More than 260,000 customers lost their NEM cryptocurrency coins – a digital currency similar to Bitcoin – in the cyber attack on the Tokyo-based company’s secure systems.

The method and time-frame for repaying those who lost money in one of the biggest thefts of digital money in history has yet to be agreed.

Coincheck co-founder and CEO Yusuke Otsuka has said the currency was sent "illicitly" from outside the company.

He said the company did not know how the 523 million tokens went missing and insisted the firm was working round the clock to ensure the safety of all client assets.

Mr Otsuka told a press conference at the Tokyo Stock Exchange: “We know where the funds were sent.

“We are tracing them and if we’re able to continue tracking, it may be possible to recover them. But it is something we are investigating at the moment.

“I deeply apologise to the customers we have troubled.”

Japan’s financial watchdog is still considering whether to take administrative punishment against Coincheck for the hack as a part of the financial settlements law, according to one insider.

Cryptocurrency exchange operators working within the country were required as of April 2017 to register with the government.

Operators which existed before that date, such as Coincheck, are allowed to continue offering services while awaiting approval.

It is believed that the Japanese government may use these rules to punish Coincheck for the security failures that led to the hack earlier this week.

Cryptocurrencies are particularly popular among young Japanese investors lured by the prospect of strong profits in an economy that has seen ultra-low interest rates for many years and low returns from traditional assets.