Coincheck's Withdrawals Frozen as Wallet Loses Over $723 Million

In a press conference at 23.30 Japan Standard Time (14:30 UST), Wakata Koichi Yoshihiro, the Coincheck exchange's president, and Yusuke Otsuka, the COO, announced that hackers have gained access to $533 million (58 billion yen) worth NEM (XEM) crypto coin. However, Coincheck officials admitted the company had not taken this security step with regard to the NEM virtual currency because it lacked the technological skills and personnel. Mt. Gox declared bankrupcy in what became one of the largest crypto scandals that shook the market in 2013-2014.

This time the heist affected only NEM [coin symbol XEM] cryptocurrency, which is now the 10th largest virtual currency to CoinMarketCap.

A 28-year-old computer programmer from Setagaya Ward, Tokyo, who spent ¥1 million on NEM and bitcoin last year, said, "I want detailed explanations about what happened".

Coincheck officials are now pondering a method of compensating some of the users who suffered losses, according to a user who live-tweeted the Coincheck conference [1, 2]. While this is the biggest theft in cryptocurrency history, it's certainly not the first and will not likely be the last.

Describing itself as the "Leading Bitcoin and Cryptocurrency Exchange in Asia", CoinCheck allows its users to trade in more than a dozen various virtual currencies, including NEM. "Please accept our sincerest apologies for this inconvenience", the blog post reads.

Over the next hour, all cryptocurrency trading was restricted with the exception of bitcoin.

According to Nikkei, a large Japanese publication, Coincheck reported the heist to the local Financial Services Agency and the police.

Coincheck said it didn't know how the 500 million tokens went missing, but it is working to ensure the safety of all assets.

Coincheck, a Japanese cryptocurrency exchange, is set to use its own money to pay back victims of a hack of its exchange. However, currently, the cost of these coins is around $420 million, as of writing.

The exchange has said it's considering compensating clients. Coincheck later confirmed the losses and held a press conference to provide more details.


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