Coincheck is one of Japan’s largest cryptocurrency exchange platform, it reported that over $400 million worth of NEM tokens, were stolen by hackers, leading to illegal transfer of over 500 million tokens to an unknown person.
Coincheck is yet to know how the breach occurred. Meanwhile, Japan Financial Services Agency has swong to action to tracing the illegal breach of the cryptocurrency platform. All activities on the platform has been suspended to enable them investigate the issue.
“After hours of speculation, Coincheck Inc. co-founder Yusuke Otsuka said during a late-night press conference at the Tokyo Stock Exchange that the company didn’t know how the 500 million tokens went missing, but the firm is working to ensure the safety of all client assets,” Bloomberg reports.
Coin Telegraph reported that, the coins were stolen from hot wallet, that means the hacker have access to the wallet private key.
Hot wallet is the checking account for cryptocurrency. It's only been use for transfer purpose and not for storage for longer period of time.
This theft is one among many high-profile cryptocurrency heists we’ve seen in the past few months. The spike of interest enjoyed by bitcoin and other cryptocurrencies based on blockchain technology attracted a huge number of new investors, and that influx of cash has made cryptocurrency exchanges an appealing target for hackers.
“In Japan, one of the world’s biggest markets for cryptocurrencies, policymakers have introduced a licensing system to increase oversight of local venues, seeking to avoid a repeat of the Mt. Gox exchange collapse that roiled cryptocurrency markets worldwide in 2014,” Bloomberg reports.
Choincheck has recently applied for operational license as a cryptocurrency exchange in Japan.