12/14/2023 0 Comments Coincheck theft![]() It added it would conduct hearings with other exchanges after their operators had run their own checks. ![]() The hack has drawn into focus Japan’s approach to regulating cryptocurrency exchanges. The FSA said it ordered Coincheck to submit a report on the hack and measures for preventing a recurrence by Feb 13. Last year, it became the first country to regulate exchanges at the national level – a move that won praise for boosting innovation and protecting consumers, contrasting sharply with crackdowns in South Korea and China. It is now the tenth largest cryptocurrency, with US$9 billion worth of NEMs in circulation, trading at just below US$1 per coin, Reuters reported. Typical of most cryptocurrencies, NEM markets itself as a digital coin outside the control of governments and central banks, which can be used for fast, global transactions. What is NEM?Īccording to Reuters, NEM (New Economy Movement) is a cryptocurrency launched in March 2015 by a team of five developers identifying themselves as Pat, Makoto, Gimre, BloodyRookie and Jaguar. It also does not use an extra layer of security known as a multi-signature system. The NEM coins were stored in a “hot wallet” instead of the more secure “cold wallet”, which operates on platforms not directly connected to the internet, Coincheck said. “In moving towards reopening our services, we are putting all of our efforts towards discovering the cause of the illicit transfer and overhauling and strengthening our security measures while simultaneously continuing in our efforts to register with the Financial Services Agency as a Virtual Currency Exchange Service Provider. ![]() “We realize that this illicit transfer of funds from our platform and the resulting suspension in services has caused immense distress to our customers, other exchanges, and people throughout the cryptocurrency industry, and we would like to offer our deepest and humblest apologies to all of those involved,” Coincheck said in a statement. The CoinCheck hacking attack was reported to the Japanese Financial Services Agency (FSA), and various government agencies are expected to be involved in investigating the CoinCheck security breach.BITCOIN NOSEDIVES AS SOUTH KOREA, CHINA CONCERNS GROW Investors were taken aback by the hacking attack, as CoinCheck is one of the largest cryptocurrency exchanges in the Japanese market behind BitFlyer. CoinCheck executives at a press conference, disclosing the hacking attack. It also has a strict licensing program for cryptocurrency exchanges, which was created to ensure the quality of security measures and infrastructures employed by trading platforms. Japan is the largest cryptocurrency exchange market globally, with daily trading volumes significantly larger than that of the US and South Korean markets. NEM developers and the open-source development community have reaffirmed that a hard fork will not be executed to recover lost funds from a centralized cryptocurrency exchange. While it remains unclear whether other cryptocurrencies were stolen from the exchange, as of now, it has been confirmed by CoinCheck that $530 million worth of NEM has been stolen. “It was hard for us to manage cold wallet,” the CoinCheck team said. As such, the majority of large-scale cryptocurrency exchange in the industry only store a small portion of funds in hot wallets and the rest in cold wallets, securely kept offline and out of reach from hackers. Unlike cold wallets, which are secure and kept offline, hot wallets can be accessed if servers are breached by hackers. MineCC, a Japan-based cryptocurrency analyst, reported that during an official public conference, CoinCheck executives admitted that all funds stored in its hot wallet were stolen by an unknown group of hackers. According to major Japanese cryptocurrency exchange CoinCheck executives, more than $530 million worth of NEM has been stolen from the trading platform.
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