Coincheck Starts Refunding Victims of Crypto Hack, Resumes Limited Trading

| Updated
by Bhushan Akolkar · 3 min read
Coincheck Starts Refunding Victims of Crypto Hack, Resumes Limited Trading
Photo: Japanexperterna / Flickr

Coincheck is finally compensating all the victims of the hack as promised earlier. The exchange is also allowing customers withdraw their crypto holdings.

Starting today, Japanese cryptocurrency exchange Coincheck has started to refund all its customers who were the victims of the crypto hack that wiped out $530 million of funds being stolen from the customer accounts. In the latest blog post dated March 12, Coincheck has announced that it has started refunding its users at the rate of 88.549 Japanese yen (or $0.83) per NEM token stolen.

This is exactly the same rate which was priorly decided as a part of its initial compensation plan. Coincheck said that the refund will directly appear in the account of all those customers who held the tokens at the close of 26th of Jan, Japan time.

Earlier this year on January 26th, Coincheck reported one of the largest hacks in the history of cryptocurrency. A total of $530 million in NEM tokens were lost, following which Japan’s financial watchdog The Financial Service Agency (FSA) started taking quick action by raiding 15 other cryptocurrency exchanges that were missing final registrations with the regulatory agency.

After a month-long probe by the FSA and having faced several class action lawsuits, the exchange has finally initiated the refund today as promised by the exchange’s CEO and COO during a press conference last Thursday. In addition to the refund, the exchange has also resumed partial trading on its platforms thereby allowing the customers to withdraw their crypto holdings for Ethereum (ETH), Ethereum Classic (ETC), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH).

While resuming its crypto sales services, the exchange also addressed its business improvement order: “We 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.”

As the exchange is resuming its operations back to normal, another report which has come to light show that Coincheck was being compromised weeks before the actual theft took place. As reported by Japan’s local publication Nikkei Asian Review, Coincheck earlier identified that the cause of the theft was a malware infecting the company’s internal computer systems.

However, the new report released by an anonymous source being said to police investigation states that the hackers had sent several phishing emails to Coincheck employees in the early January. As the employees tried to open the links in the email a virus was thus infused into their computers.

The report also states that the hackers were then able to get access to the private keys of a large number of customer accounts as Coincheck has not installed proper tools before the theft which could detect any sort of communication between itself and the external servers.

In the after theft drill, some of the NEM tokens traced to a Japanese NEM exchange Zaif as well as to a Canadian cryptocurrency exchange. Well, as things resume to normalcy after a long time we hope that the exchanges in coordination with the FSA have implemented enough security measures to prevent any such theft again in the future.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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