NEM Foundation Calls Off Chase for Stolen Coins from $530 Million Coincheck Hack

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The NEM Foundation has called off the hunt for the more than 500 million XEM tokens stolen in connection with a record-setting theft at cryptocurrency exchange Coincheck, as cybersecurity experts believe most or all of the funds have been laundered by the hackers.

In a statement dated March 19, the NEM Foundation disclosed that it had disabled the tracking mosaic that had been assigned to the hacker’s accounts in February to help law enforcement and the NEM community to track the funds — worth $530 million at the time of the hack — and prevent them from being laundered through reputable trading platforms.

From the 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.”

Earlier this month, CCN reported that that the hackers had laundered at least 40 percent of the stolen funds, primarily through dark web channels, and that the coins had ended up at exchanges Japan, Canada, and China.

However, money launderers quickened their past over the past several weeks, and on Thursday, Japanese public broadcaster NHK World reported that all of the stolen XEM appear to have been transferred out of hacker-owned accounts. This likely indicates that the hackers have completed laundering the funds.

It is unclear whether NEM’s mosaic tracking system succeeded in helping law enforcement seize any of the stolen funds, and the Foundation said that it will not discuss the matter due to the “sensitive nature” of the continuing investigation.

Two months have passed since the theft, but the individual or group behind hack still remains a mystery. South Korean intelligence officials have reportedly identified parallels between the attack’s methodology and hacks attributed to North Korea’s government, but no perpetrator has been formally accused by law enforcement.

Featured image from Shutterstock.

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Josiah is an assistant editor at CCN. A former ancient and medieval literature teacher, he has been reporting on cryptocurrency since 2014. He lives in rural North Carolina with his wife and children. He holds investment positions in bitcoin and other large-cap cryptocurrencies. Follow him on Twitter @Y3llowb1ackbird or email him directly at josiah.wilmoth(at)ccn.com.