Coincheck To Start Repaying Customers Affected By $530 Million Hack Today

Rodiano Bonacci
Marzo 13, 2018

Suspicious communications between the computers of Tokyo-based cryptocurrency exchange Coincheck and unidentified servers outside Japan began weeks before the January 26 theft of 58 billion yen ($542 million) of the cryptocurrency NEM, a new finding suggests, a person close to the police investigation said. Coincheck has now said that it will start repaying affected customers from today.

This is exactly the same rate which was priorly decided as a part of its initial compensation plan. The hack resulted in coins worth $530 million being stolen and while Coincheck was quick to say that it would repay the affected customers, it didn't detail the manner and time it would take to do that.

Japan's Financial Services Agency (FSA) had initially responded to the hack by conducting on-site inspections of the 15 unregistered cryptocurrency exchanges in Japan.

After a month-long probe by the FSA and having faced several class action lawsuits, the exchange has finally initiated the refund today as promised by the exchange's CEO and COO during a press conference last Thursday.

Coincheck imposed curbs on trading and withdrawal of some cryptocurrencies including Bitcoin on its exchange after the hack in January. The five exchanges ordered to improve internal controls are Tech Bureau, GMO Coin, Mister Exchange, Bicrements, and Coincheck, reports the Financial Times. The exchange further stated that it will take more time to resume services for other assets.

According to Nikkei Asia Review, the cause of the breach, as identified by Coincheck previously, was a form of malware that had infected the company's internal computer systems.

The finding suggests someone hacked into the Coincheck system via employee email and stole a "private key" necessary to transfer NEM.

In the after theft drill, some of the NEM tokens traced to a Japanese NEM exchange Zaif as well as to a Canadian cryptocurrency exchange.

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