crime

Crypto exchange Coincheck to refund customers after theft

23 Comments
By Geoffroy van der Hasselt

The requested article has expired, and is no longer available. Any related articles, and user comments are shown below.

© 2018 AFP

©2019 GPlusMedia Inc.

23 Comments
Login to comment

It's obvious that virtual currency are not safe.

Bitcoin has never been hacked (and I'll say it - I don't think it ever will), yet you're claiming it's obvious that it's not safe. It's not obvious to me. Please explain how something that has never been hacked, and is likely unhackable, is not safe?

0 ( +0 / -0 )

The company said it will use its own funds to reimburse all 260,000 customers who lost their holdings of NEM, the 10th biggest cryptocurrency by market capitalisation.

.....The resulting 58 billion yen ($530 million) loss exceeded the value of bitcoins which disappeared from MtGox in 2014.

.....Many Japanese, especially younger investors, have been seduced by the idea of strong profits as the economy has seen years of ultra-low interest rates offering little in the way of traditional returns.

The numbers are increasing. It's obvious that virtual currency are not safe. It's up to individual investors to invest wisely. Your choice.

0 ( +0 / -0 )

I hope there's an investigation, they completely lied and misled customers on their website. "All bitcoins are kept on the cold wallet so no chance of your coins being lost to hacks"! Sure, technically true for Bitcoin but the average user will also assume that this will be the case for all the coins. They also tout the best security in the business but the NEM developer specifically called out Coincheck for not following recommended protocols and being lax with security despite several warnings. These assholes got lazy and greedy and now they have to pay the penalty, I give them some credit for owning up and paying out of their own pockets though.

1 ( +1 / -0 )

These hacks have ahapened before.  folks will get back a % of their losses.  Coincheck doesn't have the kind of money they are talking about.  thye will try to delay refunds or pay out in some kind of tokens or something.  Prrof will be when someone tries to withdraw their JPY or USD and can't,

Few of my friends had their Coincheck accounts frozen - I don't feel like such a Cassandra now.

1 ( +1 / -0 )

So coin check will come out of pocket, just happened to have half a billion dollars on hand to cover?

@papigiulio Bit coin was not hacked, the exchange was hacked.

0 ( +1 / -1 )

I don’t know why the government would bail them out. Especially since it now is known Coincheck didn’t have a license (even though many virtual currency related sites reported that they did). They were in operation before the new rules requiring licensing went into effect and according to the latest reports, their application has been under review since September. Many other companies have received license, but not Coincheck.

1 ( +1 / -0 )

Another explanation is a bailout by the government to avoid panic in the crypto market. Because they were responsible for the most crypto friendly regulations and laws in the world as they believe strongly its a business chance for Japan

I strongly doubt the government has secretly bailed them out. I don't think the government cares about panic in crypto markets, which already go wild every day of the week as it is without a home grown mishap.

While Japan has too many restrictive regulations in many indutries, in financial regulation I think it does pretty well in terms of its frameworks for permitting new operators to come enter the fray. They are happy to allow for innovations in this space.

1 ( +1 / -0 )

Coincheck is in business since 2014

There are reports that 90% of the hacked NEM belonged to Coincheck itself, not to customers.

as to why they own so much NEM, it was only 1 year ago, NEM was worth 50x less, so if they had 10M to invest, its already a more possible figure, and if they bought it even before, they could have bought their stack for much less...

So it COULD be true that they really have so much money, just because they bought coins for peanuts 2 years ago or before.... the question is rather why didn't they sell till now ???? and why if they had so much money weren't they able to hire a few guys to improve security... But you see incompetence in the biggest financial companies so why not in a small startup ?

Also if those reports are true, the amount to be reimbursed to customers is much lower than the headline figure for the hack.

Another explanation is a bailout by the government to avoid panic in the crypto market. Because they were responsible for the most crypto friendly regulations and laws in the world as they believe strongly its a business chance for Japan

Yet another possible explanation is that they found out who the hacker is. Its known that the hacker can't spend his stolen coins because they have been "marked" [this is possible with NEM technology, and has been done]. So they have negotiated with the hacker but want to keep the whole thing silent.

-1 ( +1 / -2 )

Sorry, I got interrupted and sent off an unfinished post.

My point was that if Coincheck had wanted to use a stall technique they could have avoided the second announcement altogether. “All hell” was already broken loose after the first press conference. Anyway, time will tell if people recover anything and to what extent.

-1 ( +0 / -1 )

Sorry but a total bitcoinn00b here but wasn't bitcoin suppose to be an unhackable digital currency?

2 ( +2 / -0 )

Ricky Kaminski,

Actually, in their first press conference they did not say customers would be refunded. This article is about their second press conference.

1 ( +1 / -0 )

Heard this on the radio yesterday and if I got the Japanese right they said that the timing of the refund is not yet decided. Sounds like a standard little Japanese style stall to me folks. There was even a nice bowing ceremony. If they had come out and said they can’t afford to pay their customers back all hell would have set loose. A nice media frenzie ensues. 400 million usds, better get to work.

2 ( +2 / -0 )

No doubt will be bailed out by the J taxpayer. Socialize the losses to keep the Lemmings happy

1 ( +2 / -1 )

Ponzu.

0 ( +2 / -2 )

Interesting as yesterday they were saying maybe they couldn’t do anything. Now they refund half a billion dollars?

0 ( +1 / -1 )

big surprise more bitcoin scams. wow amazing.

-2 ( +2 / -4 )

This raises more questions than answers. Coincheck has only been in business since 2014, so do they really have $400 million dollars just lying around? If so, where did it come from? According to Wikipedia they process $160 Million in customer transactions every month. Even if they are able to skim 2% of this as profit (which sounds quite optimistic to me) it would still take over 10 years to recover the losses.

Also, who are the shareholders in Coincheck and are they all onboard with this generous plan to voluntarily reimburse customers? Because remember, if it was a theft the company may have no legal obligation to refund these accounts. I think there is much more to come with this story.

2 ( +3 / -1 )

coincheck are just going to magic up all money to refund everybody?

i really don’t think so.

Somebody or a consortium of people/ companies have come up with this money in order to protect their own interests.

If they hadn’t, many of the new fish would have made a run on them and the whole house of cards would have came tumbling down.

4 ( +6 / -2 )

Refunding 400 million USD to customers "from their own funds". Of course that will happen, who would doubt that?

2 ( +2 / -0 )

@ Iron Beard.

Dido about the wallet services. It is good advise for anyone in Crypto. There is a long story that I will not bore you with as to why I- we/wife got involved with Coin-check. Let me just say that I made a commitment to a Japanese college at a social gathering. Open smart phone and their you go. Had I not kept the commitment. I would have lost face and the money. Now, I have been using Trezor with success.

But yes you are 100% right. Lesson learned (ouch) and consider my self lucky I am being compensated back.

@ Nan desu ka. Coincheck did not recover. But still my investment is coming back. Money is money or ¥en. No matter where it is coming back from.

-1 ( +2 / -3 )

Slickdrifter - they didn't recover any funds. They are going to reimburse you using their own money.

You really should use a hardware wallet like a Ledger is you have any money in Crypto. Let this be a lesson! Maybe the next exchange to get hacked won't have such deep pockets or the inclination to reimburse their customers using their own funds.

3 ( +3 / -0 )

bitFlyer is an exchange not a currency. No one "accepts" bitFlyer.

2 ( +3 / -1 )

'NAN DESU KA Jan. 27  04:49 pm JST

If you can afford to play with crypto, then you ought to be able to afford a crypto hard wallet. Leaving your crypto to be managed by these online exchanges is absolutely dumb!

Coincheck will not recover diddly, that money is gone!-----Really! Got it back.

1 ( +3 / -2 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites