Coincheck experienced one of the largest Cryptocurrency heist ever when hackers stole more than $500 million worth of NEM cryptocoins from it.
It's also suspected that an additional $123 million worth of XRP coins was also hacked at the same time.
The Exchange quickly halted all related transactions. including all Ripple transactions as well.
As with other cryptocurrency hacks, the stolen coins were apparently kept inside online "hot wallet" rather than being deposited in an offline "cold storage."
The Japanese exchange assured that its 260,000 affected customers will have their money back using its own capital. refund the stolen money using its own capital.
NEM Foundation president Lon Wong confirmed the hack, and called the incident as one of “the biggest theft in the history of the world”. Managers of Coincheck apologized (seen below) at a news conference following the exchange's loss.
The stolen NEM and Ripple coins can be tracked through the blockchain ledger, meaning that the stolen coins could eventually be reimbursed, unless the hackers never intend to exchange the coins to fiat currency.
The cryptocurrency revolution is powered by decentralization, out of the reach of large banking corporations. This enabled people to create new wealth, but at the same time many security problems based on its blockchain technology.
The theft also highlights the vulnerabilities in trading an asset that global policymakers are struggling to regulate, and the broader risks for Japan as it aims to leverage the fintech industry to help its economic growth.
What's more, social and political factors are also playing parts that lead to fear, doubt and uncertainty in the cryptocurrency world. These external influences cannot be predicted accurately. But still, the trend and hype of cryptocurrencies are still high, resulting the market capitalization to continue rising.
NEM, popular in East Asia, has a total market capitalization of $8.49 billion, making it the 10th largest cryptocurrency at the moment of breach.
It fell to $0.78 from $1.01 on that day, but recovered slightly to $0.97 on January 29th, according to CoinMarketCap. During that time, cryptocurrency related shares mostly rose in Tokyo.