coincheck - Coincheck Hack – The Company Will Refund Investors Who Lost NEM

Coincheck Hack – The Company Will Refund Investors Who Lost NEM

Coincheck, one of the largest cryptocurrency exchanges in Japan, has been hacked on January the 26th. The company announced that they lost 523 million NEM coins (XEM) which were worth around $500 million dollars. Coincheck has announced that they are going to refund investors that lost their NEM during the attack.

Coincheck Refunds Investors

On January the 27th the company has released a statement in which they explain how they are going to refund investors who lost their NEM coins. Approximately 260,000 users have been affected by the illicit transfer of funds.

The users will be paid in JPY through Coincheck Wallet using the XEM/JPY rates on the cryptocurrency exchange Zaif. At the moment, the cryptocurrency exchange did not decide when they will be issuing the payments. Furthermore, Coincheck does not know which will be the method for applying for reparations. It is important to mention that most of the funds used for reparations will be derived from company funds.

When the funds were stolen, the company has given a press conference in which they explained the situation occurred. Besides that, the Coincheck has been deeply upset about the whole situation.

“We realize that this illicit transfer of funds from our platform and the resulting suspension in services has caused immense distress to our customers, other exchanges, and people throughout the cryptocurrency industry, and we would like to offer our deepest and humblest apologies to all of those involved,” the company wrote in the statement.

This may be one of the biggest hacks in the history of the cryptocurrency space. Yes, even bigger than MtGox. But there are several reasons why this hack has not been as important as the MtGox one. First, MtGox was managing more than 70% of the Bitcoin transfers all over the world. Second, the cryptocurrency market today is more diversified and bigger than ever, meaning that $500 million dollars today are not the same as $500 million dollars 5 years ago.

Clearly, it is important to attack the reasons why this hack occurred. Apparently, the cryptocurrency exchange was not using cold wallets to store the NEM Coins but instead, simple hot wallets.