$550 Million in NEM Stolen From Coincheck Cannot Be Recovered
March 28 2018 - 10:58AM
ADVFN Crypto NewsWire
Bitcoin Global News (BGN)
March 28, 2018 -- ADVFN Crypto NewsWire -- On January 26th, hackers
stole 500 million NEM tokens ('XEM'), worth $550 million, from
Japanese exchange Coincheck. A Tokyo cybersecurity firm has now
determined that nearly all the stolen XEM have been laundered
through dark web channels and are unrecoverable.
NEM's protocols should allow transactions to be traced in
real-time, which should have aided Coincheck and the 100 Tokyo
Metropolitan Police Department officers assigned to the case in
identifying wallets attached to the heist. But, for some reason,
this did not work, and the automated tagging system was disabled
last week by the NEM Foundation as it apparently gave up on
tracking down the thieves and recovering the stolen XEM. NEM issued
this statement:
“Beginning March 18, the NEM.io Foundation has disabled the
tracking mosaic that was put into place to monitor XEM movements
from the Coincheck theft. This effort was effective at reducing the
hacker’s ability to liquidate stolen XEM and provided law
enforcement with actionable information. We don’t plan to release
further details due to the sensitive nature of this
investigation.”
The stolen XEM have all been transferred out of hacker-owned
accounts, thus completing the laundering of funds.
Japanese blockchain expert Masanori Kusunoki noted, "It has
become evident we cannot block currency laundering just because all
transactions are recorded. Exchange operators need to make prior
agreements on the handling of stolen virtual coins."
Coincheck has initiated its promised reimbursement process last
week, paying out $433 million USD to compensate 260,000 customers
that stored NEM on the exchange. Reimbursement is in Japanese Yen
at a rate of 88.5 yen ($0.83) to one XEM.
By: BGN Editorial Staff
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