Japanese Cryptocurrency Exchange Loses Over $500 Million In Heist

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What is believed to be the biggest cryptocurrency marketplace hack ever has just occurred in Japan, where digital thieves made off with over half a billion dollars worth of NEM (XEM) tokens, CoinDesk reports.

Bloomberg, which had a presence at the press conference, has reported that 500 million NEM tokens were looted from Coincheck's digital wallets.

A statement on the company's website says that the funds were "illegally" transferred away from the platform, but that the culprit and their methods have yet to be identified.

Finally, the hack of Nicehash, a bitcoin mining pool, in December 2017, was the most recent major theft of cryptocurrency before the Coincheck breach today.

Coincheck announced the shutdown of NEM deposits at about noon Japan Standard Time Friday (10:00pm Eastern Time on Thursday).

Rieger said third parties helped with tagging the accounts by sharing information about legitimate Coincheck withdrawals. However, Cointelegrpah reports a much higher number, claiming that 523 million NEM coins were taken with a market value of approximately $534 million. The company subsequently said that it had suspended all withdrawals, stopped trading in all cryptocoins except Bitcoin, and halted deposits into NEM coins. The full amount, however, may not be known until complete investigation is carried out by Coincheck and the investigators.

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Coincheck is preparing to file a claim with the Financial Services Agency and the Tokyo Metropolitan Police while conducting an investigation into the cause of the hack and where the virtual currency went. While that may be peanuts compared to the 30 trillion yen or so once held by Bitcoin, the largest of any digital currency, NEM was popular with individual investors.

The exchange explained that it was planning to move the assets offline but did not have enough manpower to do the job.

As news of the hack broke, anxious Coincheck users braved the frigid weather to gather at Coincheck's headquarters in Shibuya district to get more information.

Coincheck has 71 employees and was founded in 2012 and is headquartered in Tokyo's Shibuya district. Japan is the first country to license crypto exchanges, with its first 11 licenses handed out in September.

Meanwhile, news of the hack has led to a drop in the value of cryptocurrencies. The exchange has about 6 percent of Yen-Bitcoin trading, ranking fourth by market share on CryptoCompare.

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