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Coincheck to Begin Compensating NEM Hack Victims Next Week

Last Updated March 4, 2021 5:05 PM
Samburaj Das
Last Updated March 4, 2021 5:05 PM

Japanese cryptocurrency exchange Coincheck has confirmed it will commence compensating users impacted by the $530 million NEM theft in January, from next week.

In an announcement today, Tokyo-based exchange operator Coincheck said it will begin compensating customers who suffered losses by the end of next week. While details are scarce presently, Coincheck chief executive Koichiro Wada and operations chief Yusuke Otsuka said more details will be revealed in the coming days, speaking at a press conference today.

On January 26th, the executives confirmed widespread rumors of a massive theft of some 526 million NEM tokens, worth over $530 million at the time, which is now the biggest cryptocurrency theft ever. While lifting a temporary freeze on fiat withdrawals in February – customers withdrew 40.1 billion JPY ($372 million) in a single day – the exchange confirmed it would compensate each stolen NEM token at 88 yen (0.83 USD).

Japan’s Financial Services Agency (FSA), the country’s financial regulator, confirmed it would ramp up its scrutiny of domestic exchanges in the days following the theft with on-site inspections.

Under new legislation that effectively recognized bitcoin as a method of payment from April 2017, Japanese exchanges are required to register with the FSA and comply with guidelines to operate in the country. Sixteen out of 32 domestic exchanges have registered thus far, with Coincheck allowed to operate among the latter half since they preceded the law. The FSA has since concluded its first phase of inspections and is gearing up to administer punitive measures against exchanges that could include suspension orders.

Coincheck, meanwhile, insists it is still hopeful of gaining a license from the FSA after receiving a ‘business improvement order ’ from the regulator today. Coincheck’s executives confirmed the exchange will resume listing and trading some cryptocurrencies next week while suggesting that the NEM theft occurred after hackers infiltrated an employee’s computer using malware.

Featured image from CCN.com arhive.