Coincheck Japanese Cryptocurrency Exchange, one of the largest in the country, was a victim of massive piracy resulting in a loss of 523 million NEM coins, worth about $ 534 million

Coins were stolen via several unauthorized transactions from from a hot wallet at 3:00 am local time on Friday, January 26th.

After the hack, the Coincheck exchange organized a press conference, attended by Japanese correspondents of Cointelegraph, to provide details of what happened and what happened. is coming.

NEM stored on hot wallet, private key stolen

only involved NEM. No other cryptocurrence, including Ripple (XRP), was stolen, unlike the first reports covered by Cointelegraph.

According to the representatives of the exchange, the hackers were able to steal the private key for the hot wallet.

All the money stolen belonged to the customers of the exchange. The "inappropriate" movement of funds was reported by Coincheck to the Japan Financial Services Agency, as well as the police later the same day.

Shortly after the violation, the company stopped all withdrawals from the site, hoping to stop further damage to its funds. When asked if they will start authorizing cash withdrawals " at least" Coincheck responds that this will be done after they have determined the best way to proceed .

It appeared that the funds were stored on a single wallet rather than on a much more secure multisig wallet.

The representatives of Coincheck claimed that the configuration of security differed between different pieces of the stock exchange.

Other cryptocurrencies on the site are currently stored in multisig portfolios, but the NEM did not. Pressed by the media, the company insisted that "safety standards were not low ", but the lack of multi-perspective protection for NEM may indicate the opposite.

Various types of portfolios to house different assets. Specifically, Bitcoin and Ether are stored in cold storage portfolios, with Bitcoin having in addition a multisig address. Ether, " given its nature ," is not stored on a multisig wallet.

According to their statement, more than half of the 80 permanent employees of Coincheck work on security systems.

In the future, Coincheck claims that he knows the address where the stolen NEM is currently stored by hackers, and that he hope to be able to find the culprits.

Although the company can not disclose how many users have been affected, it has expressed the desire to repay all lost money.

When asked if they will resume their activities or declare bankruptcy, Coincheck They said that they "would continue to operate" in principle.

While the exchange has expressed the wish to repay all the lost funds, they are nevertheless thinking about how to approach the situation. According to the press conference, the "worst case scenario " would be that funds can never be returned.

When asked if they have words for customers, Coincheck's representatives said they " deeply regret " what they do ;happened.