Update: 1:51 am JST: Added official announcement from NEM: We’re working with Coincheck to track the movement of the stolen NEM Coins.

Update: 1:40 am JST: Coincheck’s press conference is finished

Update 11:08 pm JST: Coincheck will have a press conference at 11:30pm Japan Time.

Update 8:24 pm JST: Coincheck restricts NEM deposits.

Currently, credit card, Pay Easy, and convenience store payments are suspended. We sincerely apologize for these inconveniences and will continue to do our best to be back to normal operations as soon as possible.

https://t.co/4OCB0LPDuz — Coincheck (@coincheck_en) January 26, 2018

Updated- 6:36 pm Philippine time: We included the statement from Mr. Lon Wong, president of the NEM Foundation.

Tokyo. Popular cryptocurrency exchange site Coincheck is temporarily suspending trading of XEM (NEM).

Coincheck halts NEM Trading

Coincheck announced on its blog its decision to restrict NEM trading after reports surfaced of deposits not being reflected in the users’ accounts. The initial advice is to refrain from depositing XEM in user accounts.

The exchange site further released a statement around 12:38 pm (JP Time) asking everyone to also refrain from trading XEM. In a matter of minutes, the company raised its warning, advising users not withdraw XEMs temporarily.

When inquired, Coincheck’s only response is that users wait for an official announcement soon.

Responses

Blockchain expert Mr. Koji Higashi noted that all altcoin trading is halted at Coincheck, although bitcoin trading still continues.

There is a rumor that coincheck, the biggest crypto exchange in Japan, has lost up to 600 million USD worth of XEM in a hack. But it's not been confirmed officially yet so be warned about FUD and misinformation until the details come out. https://t.co/fduwzCt01E — Koji Higashi (@Coin_and_Peace) January 26, 2018

Initially, XEM deposit/withdrawal was suspended. Now they have stopped withdrawal/deposit of all coins as we as JPY and trading of altcoins altogether. (BTC trading still alive) Not sure what exactly happened but this is not looking good so far. — Koji Higashi (@Coin_and_Peace) January 26, 2018

Meanwhile, according to Mr. Ichiro Yamamoto, a famous writer from Yahoo Japan, Coincheck should have recognized the incident by 2:00 pm because they contacted the NEM Foundation around 2:40 pm (Japan Time). Mr. Yamamoto noted that other coins have also been stolen and that NEM is currently investigating. The article did not clarify which coins are being pertained to.

Coincheck Not Yet Licensed by the FSA

Since Coincheck is not yet licensed as an official virtual exchange by Japan’s Financial Services Agency, there is a question of how the investments are secured if an emergency event such as this one occurs. However, Coincheck notes on its security page that the users’ bitcoins are stored in cold storage. Without an official explanation, users are left guessing as to what exactly happened.

As of press time, the value of NEM has dropped as per the data from Coinmarketcap.

Evidence

In Japan, users began noticing that their XEMs are missing from Coincheck:

For the user above, he wondered why there’s only 1 XEM in his account. He’s supposed to have 500M XEMs in his Coincheck wallet.

Users Reported of Lost XRP Too

Users are also reporting of lost XRP, the currency of Ripple.

Transaction Type: Payment

Amount: 101,265,057.474195 XRP

Fee: 150,000 drops (0.15 XRP)

Sender: Coincheck

Sender Balance: 199,899.7

Receiver: rPccPbZH4YBVmjvL4dMMkrX8J3MKGLNApQ

Receiver Balance: 3,110,669,147.34739

Link: https://t.co/DEKMAfCHZR — XRPL Monitor (@XRPL_Monitor) January 26, 2018

Japanese crypto exchange Coincheck halts withdrawals, deposits, trading in NEM. Rumors is a big chunk was moved from their wallet. Also seems >$130m of XRP moved out too. I called Coincheck, but they wouldn't answer questions and asked me to email themhttps://t.co/BMJk6DpkZO https://t.co/oo6p1YSuRZ — Yuji Nakamura (@ynakamura56) January 26, 2018

NEM’s Response

Update: 1:51 am JST: NEM tweeted that it is working with Coincheck to track the movement of the stolen coins:

NEM + Coincheck are working together to track + flag the hacked wallets + related accounts with the objective of tracing the ultimate owners of the suspected wallets. NEM is identifying + flagging suspected wallets holding the stolen funds + sending info to exchanges. More soon. — Inside NEM (@Inside_NEM) January 26, 2018

In a post retweeted by Mr. Higashi, NEM is already monitoring the situation and is in communication with Coincheck to offer support.

Mr. Lon Wong, president of the NEM Foundation released a statement:

“As far as #NEM concerned, tech intact.. we advise exchanges to use our multi-signature smart contract which is among the best.. #Coincheck didn't use it & that's why could’ve been hacked. Biggest theft in history of world” @2017Lon Pres NEM (summarised) #Cryptocurrency #bitcoin https://t.co/h5GSHQxchb — Chris Breeze (@BreezeProjectCo) January 26, 2018

Coincheck

Coincheck is a cryptocurrency exchange site based in Japan, the country with the highest volume of cryptocurrency trading in the world. Coincheck is joined by Quoine and Bitflyer in counting Japan as its home market. Although the latter 2 are licensed by Japan’s Financial Services Agency as an official virtual exchange site.

This is a developing story. We will further update the story once Coincheck releases an official statement.

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