Coincheck Hack: What to Know About the $400 Million Loss

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The Tokyo-based exchange said in a statement it would reimburse the 260,000 customers affected by the $400 million heist of digital currency NEM, "at a rate of 88.549 yen (81 USA cents) for each coin", Bloomberg News reported.

According to now available information, the hacker (s) stole only NEM tokens, a recently launched cryptocurrency, ranked the tenth digital currency in the world, based on market cap.

Coincheck said earlier it had suspended all withdrawals, halted trading in all tokens except bitcoin, and stopped deposits into NEM coins.

Coincheck reportedly said that it is aware of the address where the stolen NEM tokens are now being stored by hackers.

"All withdrawals from the platform are now restricted, including JPY".

"By the time the transaction is confirmed, fluctuations in Bitcoin price mean that it's for the "wrong" amount", Stripe product manager Tom Karlo said in a statement. NEM president Lon Wong called it "the biggest theft in the history of the world".

We sincerely apologize for the inconvenience this has caused everyone. "We are doing our utmost to resume normal operations as soon as possible", said a blog post from Coincheck.

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Back in 2014, Mt.Gox, at the time by far the largest Bitcoin exchange also suffered one of the biggest heists ever, losing over $400 million worth of Bitcoins. It operates exchanges between bitcoin/ethereum and fiat currencies in Japan.

The cryptocurrencies have managed to recover some of its losses in more recent trading, but at the time of writing they are still down over the 24-hour period.

Police and the Japanese government's financial regulator, the Financial Services Agency, have been notified of the breach, they said.

All told, about 500 million XEM tokens, worth roughly $420 million, was stolen from Coincheck, according to Bloomberg.

Experts say it is common for virtual currency exchanges to store currencies in systems that are shut off from outside networks to prevent outsiders from illegally accessing the systems.

It is hard to ascertain the impact of the loss of Coincheck's trading volumes on the overall cryptocurrency ecosystem. Dealings in most other cryptocurrencies were later restricted, too.

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