Coincheck to return ¥46.3 billion stolen by cyber criminals
29 Jan 2018
Tokyo-based cryptocurrency exchange Coincheck Inc yesterday said that it would return about ¥46.3 billion ($425 million) stolen by hackers two days ago in one of the biggest-ever thefts of digital money.
The sum amounts to around 90 per cent of the ¥58-billion worth of NEM coins the company lost in an attack that forced it to suspend all cryptocurrency withdrawals on Friday, except bitcoin.
In a statement Coincheck said that it would repay the roughly 260,000 owners of NEM coins in Japanese yen, though it continued to work on timing and method.
According to commentators, the theft underscored security and regulatory concerns about bitcoin and other virtual currencies amid a global boom in the virtual currencies.
Reuters cited two sources with direct knowledge of the matter as saying that Japan's Financial Services Agency (FSA) has sent a notice to the country's approximately 30 firms that operate virtual currency exchanges to warn of further possible cyber-attacks, urging them to step up security.
According to one of the sources, the financial watchdog is also considering administrative punishment for Coincheck under the financial settlements law.
Japan started requiring cryptocurrency exchange operators to register with the government in April 2017.
However, pre-existing operators such as Coincheck have been allowed to continue offering services even as they await approval.
Around 260,000 customers have reportedly been affected by the theft.
The stolen Coincheck assets had been stored in a "hot wallet", which is a part of the exchange connected to the internet, as against a "cold wallet", which stores funds securely offline.
The company claims to have the digital address of where the assets were sent.
Cryptocurrencies are accepted by as many as 10,000 businesses in Japan.
In 2014, $400 million had been stolen from Mt Gox, another Tokyo exchange, which collapsed from the attack (See: Bitcoin exchange MtGox files for bankruptcy protection).