Hacked Japanese cryptocurrency exchange, Coincheck, to reimburse customers after $400 million theft

Australian and African Tech startups forge Blockchain-Powered partnerships
Australian and African Tech startups forge Blockchain-Powered partnerships.

Hacked Japanese cryptocurrency exchange, Coincheck, to reimburse customers.
Hacked Japanese cryptocurrency exchange, Coincheck, to reimburse customers.

According to a report by Bloomberg, on Friday 26 January 2018 Coincheck, a Japanese cryptocurrency exchange, revealed that it was hacked. The Japanese company, however, were quick to announce that it will use its own capital to reimburse customers who lost money in Friday’s USD $400 million theft.

According to a report by the BBC, the Tokyo-based company suspended trading after detecting “unauthorised access” of its digital exchange. Coincheck then revealed in a statement posted on its website, on Sunday 28 January 2018, that 260 000 users were affected by the hack and theft of NEM coins, at a rate of 88.549 yen (82 U.S. cents) for each coin. A total of 523 million coins were stolen and the amount Coincheck has promised to return covers nearly 90% of the $400 million (58bn yen) worth of NEM coins lost in the attack.

Once the breach was discovered on Friday, the company was quick to freeze deposits and withdrawals for all cryptocurrencies except Bitcoin as it assessed its losses in NEM, a lesser-known currency.

The stolen Coincheck assets were said to be kept in a “hot wallet”, which is a part of the exchange connected to the internet, as opposed to a “cold wallet”, where funds are stored securely offline.

NEM prices surged 21 percent to $1.03 as of 12:31 p.m. Tokyo time, according to prices on coinmarketcap.com. Other cryptocurrencies including Bitcoin, Ether and Litecoin also gained.

“The timing of the reimbursement and the application process are currently under consideration,” Coincheck said in the statement. “The source of the refunded money is being carried out using our own capital.”

By Dean Workman
Follow Dean Workman on Twitter
Follow ITNewsAfrica.com on Twitter