February 21, 2018

Cryptocurrency exchange loses $400 million worth of coins in massive NEM hack

28 January 2018, 12:37 | Frank Carlson

Cryptos slip as Coincheck halts withdrawals

Cryptocurrencies Slump as Japanese Exchange Halts Withdrawals Trading

What is believed to be the biggest cryptocurrency marketplace hack ever has just occurred in Japan, where digital thieves made off with over half a billion dollars worth of NEM (XEM) tokens, CoinDesk reports.

As such, Coincheck's deposit restrictions have spread to cover all NEM sales and purchases, which also includes withdrawals. The largest cryptocurrency theft up until this point was the Mt. Gox one in 2014 that amounted to $340 million, but that one had a larger impact on the industry as the market cap is much higher now than it was then.

Coincheck confirmed late on Friday of the theft approximately $400 worth of NEM tokens from the exchange's wallet.

The company said Friday that more than 500 million NEM coins, the seventh largest cryptocurrency, vanished after being "illicitly" transferred off the exchange.

The theft of the massive number of NEM tokens has affected the cryptocurrency market and NEM's value tumbled 11% over a 24-hour period to 87 cents per token. Bleeping Computer reported that the hackers may have stolen nearly seven percent of all the NEM tokens now in circulation.

Police and the Japanese government's financial regulator, the Financial Services Agency, have been notified of the breach, they said.

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In an official communiqué on its website, the troubled exchange apologized for the inconvenience caused to its investors and other stakeholders.

The hack is one of the biggest ever, nearly matching the $500 million loss from the Mt. Gox exchange in 2014. Trading has also been halted for all cryptocurrencies, expect bitcoin.

Coincheck, a Japanese cryptocurrency exchange, is set to use its own money to pay back victims of a hack of its exchange. "We are doing our utmost to resume normal operations as soon as possible", said a blog post from Coincheck.

"Currently, buying and selling other than BTC (ortho coin) is temporarily suspended".

Experts say it is common for virtual currency exchanges to store currencies in systems that are shut off from outside networks to prevent outsiders from illegally accessing the systems. An earlier hack, a comparatively modest 1,500 bitcoins, in May 2015 lost $350,000 in user funds.

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