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$400 Million Hack? Japanese Cryptocurrency Exchange Halts Withdrawals as Theft Rumors Mount

Last Updated February 15, 2023 10:14 PM
Gerelyn Terzo
Last Updated February 15, 2023 10:14 PM

It’s Mt. Gox déjà vu all over again. Tokyo-based cryptocurrency exchange Coincheck has announced via Twitter that it has halted client withdrawals in all cryptocurrencies with the exception of bitcoin, evoking nightmares of Japan’s Mt. Gox meltdown and sending the top 10 cryptocurrencies lower in the interim. Bitcoin was off about 5% even though it’s not included in the suspension. NEM, deposits of which were similarly halted, was hit the hardest, down nearly 18%. Coincheck promises to provide a “detailed announcement.”

Lon Wong, president of NEM.io Foundation, tweeted, “It’s unfortunate that Coincheck got hacked. But we are doing everything we can to help.” Reports from CryptoNews that 526 million NEM (XEM) ($400 million) was stolen in the alleged Coincheck hack. Wong told media outlets that it was a single account that siphoned the funds, adding that NEM is not forking and that its technology is “intact.” He called it: “The biggest theft in the history of the world.”

Here’s the first tweet in the series, which translated says, “Currently, payment of all currencies handled by Coincheck (including JPY) is temporarily suspended. With regard to NEM, we continue to temporarily suspend deposits/withdrawals and trading.”

Coicheck proceded to apologize to its followers, in a tweet that translates, “Currently, buying and selling other than BTC (ortho coin) is temporarily suspended. We are sorry for your inconvenience, but we appreciate your understanding.”

Falling Dominos?

Blockchain Technology Consulting’s chief Hiroyuki Komiya in Tokyo said to Bloomberg: “Coincheck is a very well-known exchange in Japan,” pointing to “several outages at various crypto exchanges recently,” adding that he’s “eagerly awaiting more details.

Cryptocurrency exchanges have been a frequent target of hackers and victim of outages amid a trend of light regulation among these platforms and last year’s skyrocketing prices among the digital coins that trade, notably bitcoin. Japan regulators have ushered in a licensing system for exchanges on the heels of the near cryptocurrency-Armageddon when Mt. Gox — then leader in bitcoin transactions — was shuttered amid losing hundreds of thousands of bitcoin. In an eery and hopefully what is not a foreshadowing detail, Coincheck is domiciled in the Shibuya District, which is where Mt. Gox called home.

According to Bloomberg reports , all Coincheck calls are being directed to voicemail.  Meanwhile, the latest setback occurs just as investors are increasingly being offered more ways to trade, including Robinhood’s recent decision to expand cryptocurrencies and ax trading fees. The Coincheck withdrawal suspension is a fluid situation that CCN.com will be providing updates on.

Featured image from Shutterstock.