Over $500 million have been Lost to Hackers - Japanese Exchange

Cryptos slip as Coincheck halts withdrawals

The operator of a cryptocurrency exchange in Tokyo announced on Friday night that a hack has resulted in the loss of about 58 billion yen in the virtual currency NEM, reports NHK (Jan. 27).

After the exchange suspended deposits and withdrawals, NEM plunged more than 16 percent in a 24-hour period, according to CoinMarketCap.com.

Speculation bubbled up on Friday when the exchange halted the sale, purchase and withdrawal of NEM tokens from its exchange. Lon Wong, president of the Nem.io Foundation created to promote the technology underlying NEM, wrote on twitter that "It's unfortunate that Coincheck got hacked", but said the foundation is "doing everything we can to help". "We are advising our customers to avoid making deposits until the restriction on NEM has been lifted". It later added that it had restricted dealings in most other cryptocurrencies too.

Coincheck is not registered with Japan's Financial Services Authority, unlike other crypto currency exchanges such as Quoine and BitFlyer.

Cryptocurrency prices went down after one of Japans biggest exchanges stopped all withdrawal transactions.




The company said it will use its own capital to repay the 260,000 users impacted by the theft of NEM coins, at a rate of 81 cents for each coin, according to a statement posted on its website early Sunday. "As soon as the cause is known", it continued, "we will take measures to prevent recurrence".

Coincheck has fallen victim to a hack attack that reportedly stole more than $400 million worth of cryptocurrencies. If cryptocurrency exchanges do not ban together to require stringent operating principles and strict security protocols, government authorities will. That makes the situation somewhat unclear, although Bloomberg reported that an official said its operations fall under the supervision of the agency. While that may be peanuts compared to the 30 trillion yen or so once held by Bitcoin, the largest of any digital currency, NEM was popular with individual investors.

It is said to be considering compensating users who were affected.

UPD: There is still no clear information whether this was a hack or a planned action.

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