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Coincheck resumes partial trading, begins issuing NEM refunds

Japanese cryptocurrency exchange Coincheck has begun the slow process of refunding consumers that were affected by a large-scale hack that plundered $534 million USD worth of NEM coins.

Written by Bryan Smith Published on

In the wake of a massive hack that saw some $534 million USD worth of NEM coins plundered from Coincheck, the Japanese cryptocurrency exchange has formally moved ahead with both a refund to affected consumers and a return to trade.

Coincheck was, of course, hacked in early January – according to company representatives, hackers managed to steal the private key for a hot wallet wherein the NEM coins where stored – draining funds belonging to customers of the exchange. The company later confirmed that the ‘inappropriate’ movement of funds was noticed by the Japanese Financial Services Agency, which in turn alerted the exchange.

The exchange has now begun the arduous task of refunding NEM customers, wherein compensation will be paid in Japanese yen at the rate of ¥88.5 JPY to 1 NEM.

While considering a tie-up in a bid to restore consumer confidence in its platform, a Coincheck spokesperson elaborated that the company “Will solemnly and seriously take the measures we take carefully and will deeply reflect on ourselves and will drastically review our internal control system and management control system and will review the management strategy that thoroughly protects customers.”

Nikkei Asian Review elaborates that the affected NEM coins were plundered through a carefully constructed campaign; reportedly, malware-infected emails were distributed to several members of Coincheck’s staff and, once opened, enabled the hackers to obtain the private key to a NEM hot wallet.

Reportedly, some of the stolen NEM coins have been traced to users of a Canadian cryptocurrency exchange as well as fellow Japanese cryptocurrency exchange Zaif.

It remains uncertain as to how Coincheck’s refund process will affect up to ten lawsuits filed by disgruntled users of the exchange.

Coincheck has partially resumed trading, where Ethereum, Ethereum Classic, Ripple, Litecoin, and Bitcoin Cash are now eligible for withdrawal. Bitcoin trading remains active, as the company elected not to suspend account activities in the wake of the hack.

Have your say!

What are your thoughts? Has the success of the hacking attempt on Coincheck perturbed your faith in other cryptocurrency exchanges? Be sure to let us know your opinion on Twitter – join the conversation @coininsidercom!

Written by

South African technology journalist, podcaster, photographer and filmmaker. Hodling - BTC, NEO, ETH.@bryansmithsa

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