“The Biggest Theft in the History of the World” More Canaries?

More Canaries.

This morning, the Japanese crypto exchange platform Coincheck was hacked and had 526 million XEM (c. USD 400 m) stolen, Lon Wong, President of the NEM.io Foundation, told Cryptonews.com.

It has nothing to do with NEM – there is no issue with the tech, and according to them, the blame lies exclusively with Coincheck:

“As far as NEM is concerned, tech is intact. We are not forking. Also, we would advise all exchanges to make use of our multi-signature smart contract which is among the best in the landscape. Coincheck didn’t use them and that’s why they could have been hacked. They were very relaxed with their security measures,” Wong said.

“This is the biggest theft in the history of the world,” he added.

Wong also said that it was one account that stole the tokens, and they will do what they can to track them down. A full statement will be available later today.

Following today’s news of Coincheck being hacked and more than 500 million XEM stolen, their blogis being updated to reflect on the current situation of one of Japan’s greatest cryptocurrency exchanges. As of right now, sales and purchases of any cryptocurrency other than Bitcoin are restricted.

From Coincheck’s official blog, the update says:

Update: 6:19 pm (JST), 1/26 1
Currently, credit card, Pay Easy, and convenience store payments are suspended. We sincerely apologize for these inconveniences and will continue to do our best to be back to normal operations as soon as possible.

As of right now, the XEM coin’s price has fallen by 18.46% in the last 24 hours (and the fluctuations are almost impossible to follow, because of their erratic behavior), which is significantly higher than its previous fall of a measly 1% in the week between January 18 and January 25. The coin dropped in price to USD 0.77 at 08:34 UTC today, not long after the news was published on Yahoo Japan. It eventually recovered to USD 0.78, where we are right now, but this is still a far cry from its last week average of USD 1.05. (source: coinmarketcap.com)

An obvious answer to this sudden plunge would be panic selling – even though the President of the NEM.io Foundation told Cryptonews.com that the blame lies solely in Coincheck for not using their multi-signature smart contract.

Reactions vary from people calling this event “spreading FUD” (Fear, uncertainty and doubt, or a disinformation strategy) to those who are sure this event is just whales* moving money out of his wallet/exchange.” The public seems reluctant to consider this a hack, and with good reason: panicking, as we see from the price drop, can play heavy tricks on the market.

If the hack is confirmed, it will be even bigger than Mt Gox by USD 50m.

While the blog post apologizes for the inconvenience, many have other, more sinister ideas: “Even if this is [a case similar to MtGox], the exchange needs to return investor’s funds as much as possible,” an article on Yahoo Japan argues. “If we assume that this business management sloppiness was in order to expand profit, not only management but also shareholders shall be held responsible.”

Japan: Coincheck Exchange Freezes All Withdrawals As Up To $723 Mln Leaves Its Wallet

Update Jan. 26, 3:00 pm UTC: Coincheck has reported the likely inappropriate transfer of $532 mln worth of NEM to the Financial Services Agency and the Police, according to Nikkei.

Update Jan. 26, 2:00 pm UTC: NEM Foundation president Lon Wong has appeared to confirm Coincheck was hacked, calling the stolen funds “the biggest theft in the history of the world.”

Japanese cryptocurrency exchange Coincheck has suspended all withdrawals as a Ripple payment worth $123mln left its wallet Friday, Jan. 26.

In what appears to be a problem tied to its support of altcoin NEM, Coincheck, which is among Japan’s largest exchanges, suddenly froze NEM deposits Friday.

An accompanying blog post stated:

“Depositing NEM on Coincheck is currently being restricted. Deposits made to your account will not be reflected in your balance, and we advise all users to refrain from making deposits until the restriction has been lifted.”

The restriction then spread to NEM sales and purchases, followed by withdrawals, before the exchange subsequently stopped all currency withdrawals, both crypto and fiat.

“All withdrawals from the platform are currently restricted, including JPY. Thank you for your understanding. We are doing our utmost to resume normal operations as soon as possible,” the most recent update to the blog post reads.

Since operations began to shut down, Coincheck’s wallet has shifted a one-off sum of 101,265,057 XRP, worth approximately $123.5 mln. Unconfirmed reports to Cointelegraph additionally allege $600 mln of NEM has left the exchange.

Read Full Report here.