Japanese Exchange Coincheck, Suspected $600M XEM and XRP Stolen

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Updated- 6:36 pm Philippine time: We included the statement from Mr. Lon Wong, president of the NEM Foundation.

Tokyo. Popular cryptocurrency exchange site Coincheck is temporarily suspending trading of XEM (NEM).

Coincheck halts NEM Trading

Coincheck announced on its blog its decision to restrict NEM trading after reports surfaced of deposits not being reflected in the users’ accounts. The initial advice is to refrain from depositing XEM in user accounts.

The exchange site further released a statement around 12:38 pm (JP Time) asking everyone to also refrain from trading XEM. In a matter of minutes, the company raised its warning, advising users not withdraw XEMs temporarily.

When inquired, Coincheck’s only response is that users wait for an official announcement soon.

Responses

Blockchain expert Mr. Koji Higashi noted that all altcoin trading is halted at Coincheck, although bitcoin trading still continues.

Meanwhile, according to Mr. Ichiro Yamamoto, a famous writer from Yahoo Japan, Coincheck should have recognized the incident by 2:00 pm because they contacted the NEM Foundation around 2:40 pm (Japan Time). Mr. Yamamoto noted that other coins have also been stolen and that NEM is currently investigating. The article did not clarify which coins are being pertained to.

Coincheck Not Yet Licensed by the FSA

Since Coincheck is not yet licensed as an official virtual exchange by Japan’s Financial Services Agency, there is a question of how the investments are secured if an emergency event such as this one occurs. However, Coincheck notes on its security page that the users’ bitcoins are stored in cold storage. Without an official explanation, users are left guessing as to what exactly happened.

As of press time, the value of NEM has dropped as per the data from Coinmarketcap.

Evidence

In Japan, users began noticing that their XEMs are missing from Coincheck:

For the user above, he wondered why there’s only 1 XEM in his account. He’s supposed to have 500M XEMs in his Coincheck wallet.

Users Reported of Lost XRP Too

Users are also reporting of lost XRP, the currency of Ripple.

NEM’s Response

Update: 1:51 am JST: NEM tweeted that it is working with Coincheck to track the movement of the stolen coins:

In a post retweeted by Mr. Higashi, NEM is already monitoring the situation and is in communication with Coincheck to offer support.

Mr. Lon Wong, president of the NEM Foundation released a statement:

https://twitter.com/BreezeProjectCo/status/956835230761062405

Coincheck

Coincheck is a cryptocurrency exchange site based in Japan, the country with the highest volume of cryptocurrency trading in the world. Coincheck is joined by Quoine and Bitflyer in counting Japan as its home market. Although the latter 2 are licensed by Japan’s Financial Services Agency as an official virtual exchange site.

This is a developing story. We will further update the story once Coincheck releases an official statement.

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A business ad graduate from the Pamantasan ng Lungsod ng Maynila, Mike is the website manager of Bitpinas.com. He is responsible for almost every content you see on the site, from topic/news selection to editing of articles. Mike believes correct information about blockchain and cryptocurrency can empower people to make accurate decisions about the industry, which, in turn, should deter bad actors from taking advantage of crypto & blockchain. [Telegram @mikemislos]