Coincheck Exchange Loses 523 Million NEM Coins

81763904 - copper nem coin isolated on white background 3d rendering

 

Popular Japanese digital currency exchange Coincheck announced Friday that it has lost customer assets totaling roughly 523 million NEM coins, estimated to be worth 58 billion yen or $533 million. If those estimates are true, the losses would be greater than those suffered during the Mt. Gox theft in 2014.

Earlier in the day, Coincheck had restricted trading activity, deposits, and withdrawals for NEM. That was later followed by a suspension of withdrawals of the yen and all digital currencies held at the exchange. Shortly thereafter, the exchange notified customers that it was suspending trading for all digital currencies other than Bitcoin.

Coincheck co-founder Yusuke Otsuka briefed reporters at a press conference on Friday and claimed that the exchange was not sure how the coins were lost. He also vowed that Coincheck was continuing its efforts to protect its clients’ assets.

According to reporting from CNBC, the company’s management has acknowledged that the lost coins were being held in a hot wallet and were stolen by hackers who managed to acquire that wallet’s private key. No other digital currencies appear to have been stolen.

The country’s Financial Services Agency issued a statement in response to the incident and said that officials are looking into the situation. Though Coincheck does not currently have an exchange license, the company had previously applied for that approval and is thus subject to FSA oversight.

Reports indicate that Coincheck is already examining its options to compensate exchange customers for their losses.

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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