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Coincheck Will Refund the Stolen Assets to the Users Affected by the Recent Hacker Attack

Coincheck, a popular cryptocurrency exchange from Japan suffered a large hacker attack on January 26th, 2018. During the attack, 523 million NEM coins worth around 534 million US dollars were stolen. In a press release after the attack, representatives of the exchange said the assets were on a hot wallet with only one signature, which is a relatively low security environment.

Coincheck also said it would refund the stolen coins to the users affected by the hacker attack. The exchange will reimburse the users from its own funds. Coincheck is still considering the time frame and the methodology of the refund, but we already know that each NEM coin will be reimbursed with 88,549 Japanese yens, which is the average exchange rate from the period when the trading was stopped due to the aforementioned hacker attack. The company said it would use the exchange rate between XEM and the Japanese yen from Zaif, the second largest Japanese cryptocurrency exchange  when it comes to the trading volume of XEM on a global level.

Around 260,000 users of the exchange are affected by the hacker attack.

The company also said it would not declare bankruptcy and expressed intentions to continue operating: “With our current efforts to register the company as a cryptocurrency exchange with the Financial Services Agency (FSA), we are continuing with our operations.”

The theft of NEM coins from Coincheck is the largest hacker attack in the history of the cryptocurrencies since the collapse of Mt. Gox, another Japanese cryptocurrency exchange that stopped operating in April, 2014. The Japanese cryptocurrency market is growing again after the hacker attack and the price of NEM reacted positively on the global scale and went up 30%, according to CoinMarketCap.

Many distinguished figures from the Japanese crypto community expressed their support to Coincheck, especially after the decision of the cryptocurrency exchange to refund the stolen assets to its users. However, the community is divided when it comes to the security of the wallet in which the stolen NEM coins were being stored.

In the meantime, the development team behind NEM announced it was working on an automated system that would track the stolen coins and mark all the addresses that receive the stolen coins. This will allow the cryptocurrency exchanges to put all the addresses belonging to hackers on a blacklist, preventing them from selling the coins and earn money.

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