Saturday, 27 January 2018

Crypto-heist': Coincheck Hack Could Be The World's Biggest Ever Cryptocurrency Theft

Editors  Comments: 

Just one more reason I don't invest in bitcoin or Cryptocurrencies.

Crypto-heist': Coincheck Hack Could Be 
The World's Biggest Ever Cryptocurrency Theft

Gaurav Sharma , CONTRIBUTORI cover commodities, mostly oil & gas, often debunking risk premiums. Opinions expressed by Forbes Contributors are their own.

One of Asia’s biggest digital currency exchanges – Coincheck – has admitted the loss of around $534 million worth of cryptocurrency following an attack on its network.

The Shibuya, Tokyo, Japan-based company said hackers broke in at 02:57am local time on Friday (12:57pm EST on Thursday, 25 January). However, the breach went undetected for nearly another eight and half hours.

Most of the losses pertain to a lesser-known cryptocurrency NEM; the world’s tenth-largest by market value. As an interim measure Coincheck has suspended deposits and withdrawals for all cryptocurrencies, except Bitcoin, as it attempts to get a handle on the situation.

Gaurav Sharma

Shibuya Crossing with 109 Shopping Mall in the background, Shibuya, Tokyo, Japan © Gaurav Sharma, March 2016

Yusuke Otsuka, Chief Operating Officer of Coincheck, said the stolen funds were kept in an online 'hot wallet' as opposed to a much more secure offline 'cold wallet.'

Japan's Financial Services Agency and the police have been notified. Otsuka added: "We know where the funds [totaling 523 million NEMs] were sent. We are tracing them and if we're able to continue tracking, it may be possible to recover them. But it is something we are investigating at the moment."

The company is still examining how many customers have been affected, and it is yet to be established whether the break-in had been launched from within Japan or another country.

Pending investigation, the episode could end up as the world’s largest cryptocurrency heist yet. It could eclipse the theft of $400 million from MtGox, another Tokyo-based exchange, which collapsed in 2014.

The author is an oil market analyst and Business Editor of IBTimes UK. Follow him on Twitter @The_Oilholic

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