“Largest Hack Ever”: What We Know of Coincheck Hacking for $530 mln

hackers Coincheck Japan NEM

Coincheck exchange executives have confirmed, hackers made it away with more than $530 mln against rate on the day of crime.

Coincheck hack has excelled Mt. Gox as the most large-scale crypto exchange hacking of all time. Hackers used to thieve 850 000 bitcoins from Mt. Gox which was equal to $450 mln.  

At the moment this article is being written criminal has transferred 300000 EXM-tokens to alternative address, yet both addresses were marked mosaic to warn other exchanges against accepting funds from them.

As reported earlier, hacker broke into several wallets. Ripple registry indicated XRP deal of $110 mln from Coincheck to unknown wallet that holds XRP to the tune of over $3 bln. Still this transaction is regarded as Coincheck security measure to avoid XRP stealing.

NEM Foundation leaders have made it a point, hacking has nothing to do with security of XEM itself and it is only Coincheck that is to blame in the situation.

  • Coincheck is treating trade stocks insecurely

As CCN reported, Coincheck executives admitted at the press conference they held the bulk of the funds in hot wallets which get vulnerable if hackers obtain access to the company’s servers.

With cases of hacking becoming that frequent influential crypto exchanges hold the best part of funds in safe cold wallets.

Almost as bad is that Coincheck hasn’t implemented NEM multisig smart contact system which would augment the wallet’s security.

  • NEM won’t create a fork for recovering lost funds

As stolen funds comprised such a huge share of total XEM amount NEM was assumed to activate a hardfork to restore funds like Ethereum did after DAO hack in 2016.

However NEM Foundation President Lon Wong came out with a public statement that he is against the fork. He claimed again the hack happened due to Coincheck negligent security measures, not NEM source code drawbacks.

  • Coincheck plans to continue working and recoup lost funds

Finally Coincheck senior officers have noted, they will keep on functioning and make up losses for their clients though without going into specifics of this amend.

It is remarkable that Bloomberg reporter in Tokyo Yuji Nakamura said Coincheck hasn’t got a license from Japanese Financial Services Agency (FSA). With deadline in October FSA has extended the grace period for the company.

Theft scale and Coincheck security problems may probably make FSA taking measures against the exchange or even closing it.