Sunday, June 16, 2024

    $530 Million Worth of NEM Stolen From Japanese Cryptocurrency Exchange

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    Coincheck, one of Japan’s largest digital exchanges, has said that over $530 million of NEM was lost after it was illicitly sent outside the venue, spooking the cryptosphere where the collapse of the exchange Mt. Gox four years ago still lingers in investors’ minds. Over the past several hours NEM, which is the 10th largest cryptocurrency by market value, fell 14% to $.81 cents. Bitcoin dropped 4% and Ripple fell 8.3%.

    Company officials said during a late night press conference at the Tokyo Stock Exchange that they didn’t know how the $530 million NEM coins went missing — whether it a domestic or foreign threat — but that it’s working to ensure the safety of client assets. The press conference, though, did little to pacify the investors and journalists who were present. According to reports, the CEO barely spoke, and when asked about security weaknesses, a long pause was followed simply with an apology, not an admission of guilt or weakness.

    Coincheck issued a series of tweets before the press conference, saying: “We have suspended the deposit, withdrawal, buying and selling of NEM. We’re sorry for causing you great inconvenience and making you worry.” It also announced that it had suspended trading for all cryptocurrencies apart from Bitcoin: “Currently we’re suspending the buying and selling of altcoin except for BTC. We’re sorry to cause you great inconvenience. Thank you for your understanding.”

    Cryptocurrency exchanges, many of which operate with little to no regulation, have suffered a spate of outages and hacks amid the trading boom that propelled Bitcoin and its peers to record highs last year. Like Bitcoin, NEM is a cryptocurrency built on top of blockchain technology, but it uses a more environmentally friendly method to confirm transactions, according to its website. Bitcoin mining, on the other hand, requires significant computing power.

    Japanese exchanges started cropping up last fall, as the government gave its blessing for fully compliant markets. But as the case of Coincheck shows, those markets are still vulnerable to attacks, and Coincheck has yet to receive a license, according to the website of Japan’s financial regulator. Coincheck, founded in 2012, is headquartered in Tokyo’s Shibuya district, an area popular with start-ups that was also home to Mt. Gox.

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