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.
Gox fiasco that happened almost four years ago, Tokyo-based cryptocurrency exchange Coincheck disclosed Friday that a hacker had stolen about ¥58 billion ($532 million) worth of its holdings, sending clients into a panic about the fate of their virtual assets. The Coincheck trade said on its site Friday that it had stopped deals and withdrawals of the money, which is called NEM.
Coincheck is not registered with Japan's Financial Services Authority, unlike other crypto currency exchanges such as Quoine and BitFlyer. Shortly after it discovered the theft, the exchange suspended trading of NEM, the stolen crypto in question, then of the other dozen coins it lists.
The stolen assets were stored in the cryptocurrency NEM, one of hundreds of digital currencies created in recent years.
According to its website, which proclaims it is "the leading bitcoin and cryptocurrency exchange in Asia", Tokyo-based Coincheck was founded in 2012 and had 71 employees as of July past year.
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At the time the NEM was exfiltrated, the average price of the cryptocurrency was approximately $0.95, according to pricing data from Coinmarketcap.
Asked whether the firm had sufficient security measures in place to protect clients, Otsuka said they were doing their best but admitted they might have come up short.
Hackers managed to get a hold of the private key of the hot wallet, which was being used to store the NEM tokens, which in turn allowed them to siphon off all the funds.
According to Coincheck, the company's outstanding balance in NEM was found to have decreased dramatically on the morning of January 26.
The exchange is now investigating how many customers were impacted by the hack, and has said it is considering possible responses, including compensation for those whose NEM was taken.
Meanwhile, news of the hack has led to a drop in the value of cryptocurrencies.