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"The greatest flight in history": what we know about the $ 530 million Hack Coincheck

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This is official. The cryptocurrency exchange in Tokyo Coincheck has been hacked into what is considered the biggest trade robbery ever made. This story is developing continuously, but here is what we know so far.

This was the biggest cryptocurrency trading hack of history

At a press conference, Coincheck executives confirmed that hackers had fled with more than 500 million NMS, an approximate value of 530 million dollars at the time of the hacking, although Nikkei Veritas has tweeted known until the officials conduct a detailed investigation.

The Coincheck hack overtook Mt. Gox as the biggest cryptocurrency exchange hack in history. The Mt. Gox flew with about 850,000 bitcoins, worth about $ 450 million at the time.

Granted, Mt. Gox hack was larger as a percentage of the total market capitalization of cryptocurrency at the time of the robbery, but in purely financial terms Coincheck now holds the infamous distinction of being the victim of the biggest hack of currency exchange. cryptocurrency of history.

At the time of writing, the hacker had transferred 300,000 XEM tokens to another address, and both addresses had been marked with a mosaic, warning other members not to accept the funds.

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The hacker coincides only broke the NEM wallet of the stock market

Coincheck executives said the hack was isolated from Coincheck's NEM wallet and his other funds remain safe.

This brought relief to many traders, as early reports showed as if the hacker had infiltrated several portfolios. A Ripple controller reported a $ 110 million XRP transaction sent by Coincheck to an unknown portfolio that currently holds more than $ 3 billion worth of XRP.

However, the transaction is now considered a security measure taken by Coincheck as a result of the infiltration of his NEM portfolio.

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The leaders of the NEM Foundation pointed out that the hacking had nothing to do with the security of the XEM cryptocurrency itself and that the fault lies solely with Coincheck.

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Coincheck kept too much money in his hot wallets

As CCN reported, Coincheck officials admitted during the press conference that they kept the vast majority of their funds in "hot wallets", which become vulnerable if pirates hack the servers of the company.

Because hacks have become so common, reputed cryptocurrency exchanges keep the vast majority of their funds in "cold wallets", which are stored offline and in secure locations.

Coincheck, however, said that "it was difficult for us to handle a cold wallet", which is why the hack was much larger than other cryptocurrency swap flights Recent.

To make matters worse, Coincheck did not implement the NEM's multisignature smart contract system, which would have added an extra layer of security to the wallet.

NEM does not provide a fork to recover stolen funds

Because piracy included such a large percentage of the total number of XEMs in circulation, there was immediate speculation that NEM would activate a fork to recover pirate funds, such as Ethereum after the 2016 CAD robbery.

However, Lon Wong, chairman of the NEM Foundation, has publicly stated that he is opposed to a fork.

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Source: Twitter

In a statement, he reiterated that the hacking occurred because from Coincheck. "Relaxed" security measures, which are not a flaw inherent in the NEM source code. Wong has also encouraged cryptocurrency trading to take advantage of its multi-signature intelligent contract.

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Coincheck wants to continue to function – and to compensate its customers

Finally, Coincheck executives stated that they intended to continue to operate the stock exchange and that they would compensate customers for their losses, without going into details about the form that this compensation will take.

Notably, however, Tokyo-based Tokyo-based journalist Yuji Nakamura stated that Coincheck had not yet received an exchange license from the Financial Services Agency (FSA) of the United States. Japan. The deadline was October, but the FSA had extended a grace period to the company.

The scale of theft and the revelation of Coincheck's inadequate security practices raise questions as to whether the FSA will take action against the exchange – or perhaps even shut it down altogether.

This story develops. Follow CCN for continued coverage of this situation.

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