$530 000 000 USD





“This year started with one of the biggest crypto heists ever. Around 500 million XEM coins (native cryptocurrency of the NEM project) were stolen from the hot wallet of Tokyo-based crypto exchange Coincheck.” “In the spring of 2018, hackers infected the computers of Coincheck employees with a virus which allowed them to commit one of the largest thefts in the cryptocurrency world. More than $548 million of NEMs were stolen due to the cyber attack. Electronic security experts found that the virus penetrated the system through an infected e-mail message which was opened by one of the exchange employees.”


"The Coincheck hack is the latest in a series of attacks targeting digital currency exchanges. Cybercriminals have been taking advantage of security weaknesses at young, often unregulated businesses that are handling huge sums of other people's money." “In a press conference hosted soon after the hack, Coincheck provided the details of the attack, stating that the attackers succeeded because the stolen NEM was stored in a hot wallet. The hackers managed to steal the private keys for the wallet, successfully draining the funds into their own wallets.” “The platform announced a reimbursement plan in March after facing class action suits and intense probing by Japan’s Financial Services Agency. At the time, Coincheck said it lacked staff experienced in conducting internal checks, and performing management and security risk assessments.” “Coincheck’s misadventures led to its acquisition by Monex Inc., a Japanese financial services group in April 2018. Monex was interested to increase the company’s international outreach. It took ten months for the dust to settle, but Coincheck has now resumed its trading services.”


"On August 19, 2020, the Tokyo District Court issued an order of seizure for a portion of misappropriated funds that were stolen from the Tokyo-based crypto exchange Coincheck. The value of XEM tokens has dropped by 93% [since the original hack]. The original sum is now estimated to be worth around $39 million. Reportedly, the court issued an order of seizure from Takayoshi Doi, an Obihiro City doctor. Doi is not suspected of being involved in the 2018 hack; however, he was charged for his purchase of XEM originating from the hack. This action marked the first time that a Japanese court ordered the seizure of cryptocurrency. The funds in question amount to roughly 4.8 million yen ($45,000) in both XEM and bitcoin. Doi is expected to keep the funds safe until an official verdict is handed down"

The hack was carried out through the NEM (XEM) token which was stored entirely in hot wallets. This was the largest theft in fiat dollars, surpassing Mt. Gox, and affected 260,000 traders.

Sources And Further Reading

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