Tokyo Police Question NEM Trader Over Coincheck Theft

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Japanese police have reportedly questioned a domestic trader who converted a small portion of stolen NEM from Coincheck into Litecoin as a part of an ongoing investigation.

Citing sources with an ear to the investigation of the recent major theft of NEM tokens from Japanese exchange Coincheck, the Nikkei is reporting that police have questioned at least one individual in connection with the hack.

According to the publication, the unnamed individual had anonymously converted a small amount of the stolen NEM coins – tagged by Singapore-based NEM Foundation following the theft – into Litecoin through a dark web website. The individual, who reportedly admitted to being aware that the NEM sold was originally stoen from Coincheck, was tracked by Tokyo Metropolitan Police Deparrtment’s cybercrime division after actively monitoring websites on the dark web. Few other details are currently known.

As reported in late January, Coincheck executives confirmed a massive hack of 526 million NEM tokens, worth over $530 million at the time. The stolen NEM tokens were subsequently split up between several digital addresses, all of which are being tracked by the NEM.io foundation.

“The decentralised NEM protocol’s flexibility allows transactions to be traced in real-time, which aids exchanges to identify wallets attached to malicious activity,” the non-profit foundation said this month. “This helps make stolen XEM tokens effectively unusable, because they cannot be deposited without being flagged by NEM. “

The automated tagging system was specifically introduced with the objective of tracing stolen funds and identifying wallets holding stolen funds, enabling observers to check and verify if those funds reach regulated cryptocurrency trading platforms.

The investigation into the theft has already revealed at least one hacker possessing a portion of the stolen NEM making attempts to trade the cryptocurrency into bitcoin, last week. The hacker reportedly offered a 15% discount to bitcoin traders over the dark web to sweeten the deal with the Bitcoin-NEM swap.

Meanwhile, Coincheck has said it will re-enable withdrawals of fiat yen deposits to customers, starting tomorrow.

Featured image from Shutterstock.

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Samburaj is the Editor for CCN, among the earliest and foremost publications covering blockchain, cryptocurrency and financial technology news. He has authored over 1,500 articles for CCN and is invested in Bitcoin. Email: [email protected]