Coincheck May Have Suffered The Worst Hack In Cryptocurrency History

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The Tokyo-based exchange said in a statement it would reimburse the 260,000 customers affected by the $400 million heist of digital currency NEM, "at a rate of 88.549 yen (81 U.S. cents) for each coin", Bloomberg News reported. Coincheck to suspend all withdrawals of NEM, as well as sales and purchases.

Coincheck suspended deposits and withdrawals for all crypto-currencies except Bitcoin as it assessed its losses in NEM, a lesser-known coin.

Coincheck reportedly said that it is aware of the address where the stolen NEM tokens are now being stored by hackers. Coincheck had applied for a license but it is now waiting for a decision.

Bitcoin on Friday dropped 3.4 percent and Ripple retreated 9.9 percent, according to prices available on Bloomberg.

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The hack appears to be roughly the same scale as the 2014 Mt Gox theft, in which thieves made off with $400 million in bitcoin, causing the Japanese coin exchange to file for bankruptcy.

Coincheck was not registered with Japan's Financial Services Agency, but now the exchange is planning to do so. Coincheck co-founder Yusuke Otsuka said, "We know where the funds were sent". However, some reports, including one from The Guardian, suggest that the November loss could go as high as $300 million. The exchange has about 6 percent of Yen-Bitcoin trading, ranking fourth by market share on CryptoCompare. As a result, Coincheck restricted withdrawals of all currencies, including Yen, and trading of cryptocurrencies excluding Bitcoin. "We sincerely apologize for these inconveniences and will continue to do our best to be back to normal operations as soon as possible", Coincheck wrote in its most recent update on the situation. Kaspersky Lab's Costin Raiu said there was a transfer of $110 million worth of Ripple out of Coincheck, adding "hacking suspected". Many of these platforms are not regulated but multiple thefts have caught the attention of authorities around the world. Coincheck's president said he "deeply regretted" the issue.

Coincheck's refusal to implement the protocol is the vulnerability the hackers most likely seized upon, according to Lon Wong.

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