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Coincheck hack: $425 million to be paid back to exchange customers

Coincheck hack: $425 million to be paid back to exchange customers

After one of the biggest hacks in Cryptocurrency history, Coincheck Inc has promised to pay back its users to the tune of $425 million (46 billion Yen), reuniting 260,000 owners with their investment in NEM coins.

The hack, reported to be one of the most severe attacks in the short history of digital money, threatens to undermine the confidence in security of exchanges around the world, as speculative investors consider dabbling with coins other than Bitcoin, Ethereum and Litecoin.

And while Coincheck have committed to refunding the victims of this attack, Japanese authorities are considering administrative punitive action against the popular exchange in a bid to encourage them to increase their security protocols, but also to restore some public faith in the systems surrounding Crypto investments. This according to a source via Reuters.

Japan’s Financial Services Agency have reportedly been in contact with 30 other virtual currency exchanges, warning them that further attacks could be on the way as hackers attempt to make the most of the developing technology that supports this new wave of digital currency. Last week we reported that the infamous North Korean outfit Lazarus has been linked to a South Korea exchange attack toward the tail end of 2017.

In April 2017, the FSA in Japan employed checks on exchanges operating out of the country, but many – like Coincheck – were allowed to continue trading as they were operational before the new protocol came into play.

“It’s been long said that cryptocurrencies are a solid system but cryptocurrency exchanges are not,” said Makoto Sakuma, research fellow at NLI Research Institute. “This incident showed that the problem has not been solved at all. If Coincheck screws up its crisis management, that could deal a blow to the current cryptocurrency fever.”

Given the volatility of cryptocurrencies around the world, the news will undoubtedly create a ripple effect of both feeling and value across the community, but – as we’ve seen so many times – these will both stabilise once more. “I have to admit that all cryptocurrencies will now be tainted in their minds, so there may be a mid-term negative impact,” said Genki Oda, president of BitPoint Japan.