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A Cryptocurrency Theft Bigger Than Mt. Gox Just Happened In Japan

Coincheck lost 500 million NEM tokens.

Jordan Pearson

Jordan Pearson

Image: Shutterstock

A Japanese cryptocurrency exchange says it just experienced what may be the most financially damaging marketplace theft in the history of the technology.

The sum allegedly stolen from the Coincheck exchange—500 million units of NEM, a newer cryptocurrency—was worth roughly $500 million USD at the time of the theft, which would eclipse even the alleged 2014 hack of Japanese exchange Mt. Gox. That incident saw $450 million USD worth of Bitcoin go missing and embroiled founder Mark Karpeles in a legal drama that is still ongoing nearly four years later. According to Japanese newspaper Asahi, Coincheck has alerted police to the theft.

The theft was announced by Coincheck officials at the Tokyo Stock Exchange during a late-night press conference, Bloomberg reported early on Friday morning. At the same time, Coincheck posted a short blog post announcing that NEM deposits were being suspended, before stopping all NEM trading an hour later. Several updates followed over the coming hours, culminating in all payments being halted on the Coincheck platform entirely.

Rumors are swirling that NEM wasn’t the only cryptocurrency stolen from Coincheck. Early on Friday morning on Twitter, Costin Raiu, head of Russian cybersecurity firm Kaspersky Lab’s global research and analysis team, called attention to a $110 million USD transfer of Ripple (another cryptocurrency) out of Coincheck. “Hacking suspected,” he wrote. Coincheck has not released any information on stolen Ripple, however.

Coincheck spokespeople were not immediately available for comment.

Exchanges like Coincheck are prime targets for criminals in the cryptocurrency world, because they are a main access point for trading and often handle user funds or keep funds in reserve. In a separate incident in Canada this week, three armed men entered a cryptocurrency exchange’s offices and attempted to coerce employees to transfer funds.

If Mt. Gox can be taken as any sort of lesson, then the story of the Coincheck theft—how it happened, and what its effects will be—is just beginning.

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