Coincheck Begins NEM Hack Refunds and Resumes Limited Trading Operations

Hacks are not unheard of in the crypto world. Perhaps the most infamous hack is that of Mt. Gox in which approximately 850,000 bitcoins valued at $460 million were stolen, forcing the the exchange to close and file for bankruptcy. Although the hack happened back in February 2014, Mt. Gox is still making headlines to this day. In fact, a Mt. Gox trustee is being blamed for the recent market plunge.

While Mt. Gox may have had a sour ending, it seems things are looking up for those who were affected in the recent Coincheck hack. According to press releases published on its official website, Coincheck announced it will begin to reimburse customers who were affected by the stolen funds.

Coincheck logo

Victims will receive compensation

Coincheck’s services came to a halt in January, when around $530 million in NEM were stolen from the Japanese platform. On January 26, Coincheck confirmed that some 523 million tokens had been taken. As reported by Nikkei Asia Review, an investigation into the hack revealed the breach was due to phishing emails that appeared to be coming from a Coincheck colleague. All it took was a simple click on the sender’s address, after which “the user’s computer was infected with a virus that enabled it to be operated from outside the company.” This allowed access to the private key required to transfer NEM.

Following the hack, Coincheck arranged a press conference to discuss details of what happened and what to expect in the future. Last Thursday, the company said that compensation would commence this week. According to today’s press release, Coincheck stated it is starting to refund users at the rate of 88.549 Japanese yen (about $0.83) per NEM token. Altogether, the total payout will come out to approximately $420 million.

NEM logo

Coincheck reinstates withdrawal services

In addition to announcing reimbursement, Coincheck said that it has resumed the withdrawals of XRP, ETH, ETC, LTC, BCH, and BTC. These crypto can also be sold again, though Coincheck did point out that sales of BTC had not been stopped previously. To rebuild trust between the company and its customers, they also mentioned their commitment to improving the exchange’s management control system.

Exchange customers may also find comfort in the fact that Japan’s financial regulator, the Financial Services Agency (FSA), has conducted thorough investigations on Coincheck and did so for numerous exchanges in the country. In fact, Coincheck is required to present the FSA with a written business improvement strategy by March 22.

Exchanges step up their game to protect against hacks

While the threat of hacks may give some people reason to turn away from crypto, it should be noted that exchanges are taking commendable measures to protect their customers. Binance is the perfect example. When the popular exchange temporarily went offline due to server problems, CEO Changpeng Zhao was quick to shoot down all rumors about a possible hack.

Moreover, both Zhao and Binance’s official Twitter provided constant updates on the situation. Perhaps more notably, In response to a recent unsuccessful hack attempt last week, Binance is now offering a $250,000 reward for any information that leads to the apprehension of the hackers. Meanwhile, in the UK, several top exchanges have come together to form what is known to be the first self-regulatory body in the crypto sphere. Without a doubt, the more exchanges make the effort to provide transparency and protect customers, the greater the strides for cryptocurrency will be.

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