Will return $425 million to NEM coin owners: Coincheck

Coincheck’s statement comes in the wake of a cyber attack in which it lost $425 million of NEM coins, marking it as one of the biggest heists in the digital currency’s history.

Coincheck Inc, a Tokyo-based cryptocurrency exchange stated it would return neqarly $425 million (46.3 billion yen) of virtual money it lost to a hacking attack three days ago in one of the biggest-ever thefts of digital currency.

The attack on Friday, forced Coincheck to suspend all withdrawals of virtual currencies, other than bitcoin.

In a statement, Coincheck said it would repay nearly 260,000 owners of NEM coins in Japanese yen; it was still working on the timing and method of payment.

The hacking attack underscores regulatory and security concerns surrounding virtual currencies in the wake of the global boom that shows little signs of fizzling out.

As per two sources with direct knowledge of the matter, Japan’s Financial Services Agency (FSA) has sent a notice to nearly 30 firms that operate virtual currency exchanges in the country warning them of potentially further cyber attacks while urging them to step up their cyber security.

As per a source, FSA is also weighing the options of imposing an administrative action on Coincheck under the financial settlements law.

Incidentally, only in April 2017, cryptocurrency exchange operators in Japan were required to register with the government, however pre-existing operators, including Coincheck, were allowed to continue offering services while awaiting regulatory approval.

Coincheck’s application, submitted in September, is still pending.

In a late Friday news conference, Coincheck stated that its NEM coins were stored in a “hot wallet” instead of the more secure “cold wallet”, outside the internet. When asked why, Koichiro Wada, Coincheck’s President cited technical difficulties and a shortage of staff capable of dealing with them.

Last week, world leaders in Davos highlighted the risks and dangers surrounding cryptocurrencies, with Steven Mnuchin, the U.S. Treasury Secretary, saying they were being used for illicit activity.

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