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NextGen Magazine


$530M Cryptocurrency Heist Biggest Ever

Chris Gaetano
Published Date:
Jan 29, 2018

Hackers raiding a Japanese cryptocurrency exchange walked out with $530 million worth of cryptocurrencies, the biggest such haul ever recorded, according to CNN Money. The previous record-holder was MtGox, another Japan-based exchange that was one of the biggest such entities in the world until hackers made off with an estimated $400 million, triggering the site's eventual shutdown. The heist, involving Coincheck, one of the biggest exchanges in Asia, targeted the accounts of 260,000 over the weekend, though it didn't target more well known cryptocurrencies like Bitcoin or Ripple. Instead, the hackers made off with NEM, a lesser known currency. 

Coincheck said it would spend $426 million from its own funds to cover user losses, though would not say exactly how it would get the money to affected users. 

While the company won't say exactly how they were hacked, Bloomberg notes that Coincheck has admitted to keeping customer assets in a "hot wallet" connected to external networks, versus a more typical "cold wallet," which is not. It also lacked multi-signature security. Because the ledger is public, anyone can see what exactly is happening with the stolen coins, even if no one is sure who now holds them. This makes converting them into sovereign currency without revealing themselves a challenge. However Bloomberg also pointed out that they could convert the NEM into another, more anonymous cryptocurrency like Monero, and then convert that into sovereign currency.