Coincheck Exchange Hacked?

in #steem7 years ago

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The disclosure that one of Japan’s biggest cryptocurrency exchanges lost about $400 million in NEM tokens is spooking investors in a country still wary of such venues four years after the collapse of Mt. Gox.

After hours of speculation Friday night, Coincheck Inc. said the coins were sent “illicitly” outside the venue. Co-founder Yusuke Otsuka said the company didn’t know how the 500 million tokens went missing, and the firm is working to ensure the safety of all client assets. Coincheck said earlier it had suspended all withdrawals, halted trading in all tokens except bitcoin, and stopped deposits into NEM coins.

As of now, the hackers behind the Coincheck NEM security breach are out of options. It is not possible for the hackers to convert the stolen NEM to other major cryptocurrencies like bitcoin and Ethereum because the automated tagging system will immediately alert exchanges about the tainted funds.

Due to the sheer size of the stolen funds, it is also not likely that the hackers will go through small-scale cryptocurrency exchanges to convert or launder the stolen funds.

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NEM, the 10th-largest cryptocurrency by market value, fell 11 percent over a 24-hour period, to 87 cents, as of 2:30 p.m. Tokyo time Saturday, according to Coinmarketcap.com. Bitcoin dropped 3.4 percent and Ripple retreated 9.9 percent on Friday, according to prices available on Bloomberg.

“Caveat emptor,” said Yvonne Zhang, who had spoken on a panel on the future of cryptocurrencies at an Association of Futures Markets conference in Bangkok on Friday. “The ‘investors’ that did not do due diligence and take time to understand what they’re trading in, both venue and subject matter, face unhedgable risks. If they continue to ‘trade’ the same way knowing the murky nature of this market, they’re gambling.”

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