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Coincheck promises to return 90 percent money stolen in crypto theft

Coincheck promises to return 90 percent money stolen in crypto theft

One of the world’s largest digital currency exchanges, Coincheck has assured it would refund most of the $534m worth of virtual assets lost in a hacking attack. Japan’s financial regulators said it would inspect the crypto currency exchanges and has ordered Coincheck to act over the heist.

The Tokyo-based company suspended trading after detected ‘unauthorized access’of digital exchange. The theft has affected 260,000 customers. Coincheck said that the amount it has promised to return covers nearly 90% of 58bn yen worth NEM attack.

Company Chief Operating Officer Yusuke Otsuka said 523m NEMs had been sent from Coincheck’s NEM address during the breach. Hackers broke in at 02:57 on Friday but the theft was discovered after nearly eight hours.

He reported at the Tokya Stock Exchange,‘It’s worth 58bn yen based on calculation.’

This theft has again highlighted the vulnerabilities in trading an asset that global policymakers are trying hard to regulate. The Financial Services Agency (FSA) on Monday ordered improvements to operations at Tokyo-based Coincheck. It has suspended trading in all crypto currencies except Bitcoin.

Coincheck has issued a statement saying that it would try to return about 90 percent with its funds after figuring out the time.

Coincheck also said that the NEM coins were stored in a ‘hot wallet’, but FSA has asked Coincheck to submit an incident report and measures for recovery by Feb 13.

The Singapore-based NEM Foundation said it had a tracing system on the NEM blockchain. It added that hackers have not moved the stolen money to any exchange or personal accounts but it had no way to return stolen funds. In 2014, Tokyo-based Mt. Gox filed for bankruptcy after losing around half a billion dollars of bitcoins. A similar incident happened in South Korea when South Korean crypto currency exchange Youbit shut down last month after it declared of being hacked twice in a year.

World leaders in Davos highlighted the risks associated with crypto currencies, with US treasury Secretary Steven Mnuchin stating Washington’s concern about the money being used for illegal activities.