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One of Japan’s largest cryptocurrency exchanges just suffered a hack as large as Mt. Gox. Japan’s Coincheck admitted that $400 million in NEM tokens are missing after they were sent “illicitly” outside the exchange.
The news was announced late at night after hours of speculation. During a press conference, Coincheck Inc. co-founder Yusuke Otsuka admitted that 500 million NEM tokens were missing – and they still don’t know how they disappeared. However, the exchange is working to protect the safety of all client assets.
Earlier in the day, Coincheck had halted all customer withdrawals, ended trading of all coins except bitcoin, and stopped deposits into NEM coins.
“We are looking into the facts surrounding Coincheck,” Japan’s Financial Services Agency said in a statement, as reported by Bloomberg. Japan was also the location of the infamous Mt. Gox hack in 2014, when 750,000 bitcoins were stolen. At the time, those bitcoins were worth about $450 million USD. This latest Coincheck hack is on par with Mt. Gox in terms of value. However, the overall market cap of the crypto industry has changed dramatically in that time.
It’s important to note that Coincheck is not registered with Japan’s Financial Services Authority – a regular that oversees all types of financial exchanges in the country. Other Japanese exchanges like bitFlyer and Quoine are registered with the agency.
It’s not totally clear how much was stolen during the Coincheck hack. Some reports claim that it was as much as $740 million. Others claim it was $532 million.
However, NEM Foundation president Lon Wong issued a statement on January 26 stating that the attack was “the biggest theft in the history of the world.” Yikes.
There are no details about how the attack happened. All we really know is that 500 million NEM coins were sent “illicitly” outside the venue.
As of January 26, no further information is available about the hack or how it took place. It’s unclear what kind of security procedures are in place at Coincheck, and it’s unclear whether this was an outside threat or an inside employee attack.
Stay tuned for more information as this story continues to break. Based on early reports, the Coincheck NEM attack is already much bigger than Mt. Gox
The price of the NEM tokens (XEM) has gone up 15% after the Japanese exchange Coincheck has announced that it would start trading it again. Coincheck is a well-known exchange and crypto wallet service that is based in Tokyo.
Coincheck stopped to trade NEM as it suffered one of the largest breaches in the history of cryptocurrencies in January 2018. The Japanese exchange was hacked and it lost over $530 million USD worth of XEM.
Soon after the hack was reported, the Japanese Financial Services Authority (FSA) has ordered the company to submit a detailed report on how the incident would prompt the company to improve its security for the assets of the clients in the future.
Most of the tokens that were stolen at the occasion were NEM, so the exchange halted its activities. Now it has announced that it would trade them again and that it would start trading Ethereum (ETH) and Lisk (LSK). Japanese investors will be able to use the exchange to buy and sell these tokens now.
Coincheck was quickly acquired by Monex, a Japanese financial services company, soon after the hack occurred. According to information, the sale was made for $33.5 million USD. However, the exchange has seen a decline of 66% in the revenues of its profit for the third quarter of 2018.
The major development from the company starting to offer the assets again is that now the price of NEM has gone up 15%. This is the highest price that the token had it the last nine weeks.
At the moment, NEM is the 17th largest cryptocurrency by market cap and its price reached the top of $0.114 USD at 9:15 UTC on November 12. This was the highest price since September 5. The whole NEM market now stands at $1.02 billion USD.
This happened as some other cryptocurrencies had modest gains in the market. Monero (XMR) and Ripple’s XRP where only 3% up during this timeframe. Bitcoin (BTC), for instance, was only up 0.41% following the trend of being very stable lately.
Price surges like this are not very common in the current bear market, as most of the tokens are actually losing value over 2018.
At the moment, it is still difficult to know for sure whether this price surge represents something that will continue over time and that will be improved or if it is simply something temporary and the price gains will only soon be lost.
Coincheck reportedly managed to bag 1.7 million new downloads of its mobile app since it went back online. The exchange resumed account signups, deposits, and withdrawals in October. It has also allowed some limited trading since that time.
Towards the end of December 2018, the exchange had over 900,000 new users who had confirmed their identities. This seems like a major comeback for an exchange that has had huge problems with its security in past. In fact, it has the record for the worst hack of an exchange in the history of crypto.
In January 2018, about $534 million in NEM was stolen for the exchange. The money was all lost and not a penny was recovered nor anybody found culpable in the theft. After that, all activity on the exchange was halted.
Since the hack, the exchange has been attempting to reinvent itself. To win back trust, it has been repaying victims and working to improve the security systems. Besides that, it has been trying to regularize all operations with regulators in Japan. On January 11, 2019, the exchange finally managed to complete its registration as an exchange.
In its latest earnings report for Q3 to March 31, 2019, that was published by the Monex Group, the trading volumes have grown a lot on the exchange. This was especially after depositing and purchasing activity resumed on this exchange. At the end of November, the exchange allowed full purchase and deposit for all crypto traded on the exchange.
This resumption played a role in the increased trading volumes and the growth potential for the customer base. Right now, the exchange is quite popular with millennials. This was according to the Monex Group that bought the exchange in April 2018.
In the same quarter, the exchange reported that losses had halved to about $2.97 million from $5.39 million in the previous quarter.
This was due to increased user sign up. The revenue collected during Q2 was about $2.75 million.
Monex said they have created their Blockchain Lab called BCLab. The lab will provide crypto and blockchain tech solutions to various firms. Additionally, Monex said that they believed crypto was an important aspect of all their operations. They believe that it will help them create new customers while at the same time expanding their business capability.
After the 2018 hack, it is amazing that Coincheck, which was bought for $34 million, has managed to get a license from Japanese regulators. The license means that the exchange can offer its services anywhere inside Japan. To get the license, Monex overhauled all the management and security systems. This way, the theft will never occur again.
However, there is never a guarantee with online systems. Hackers will always be snooping around waiting for half a chance to strike. If Coincheck were to suffer such a massive attack again, it is unlikely it would ever recover again.
According to new reports, Coincheck, one of the largest cryptocurrency exchanges in Japan, has just launched OTC (Over-The-Counter) trading desk for Bitcoin. The exchange’s new move comes as the latest effort to attract large-scale institutional investors to the digital currency space.
The new OTC trading desk will allow its clients to trade large quantities of Bitcoin (BTC) directly. The lowest amount that can be traded is 50 BTC, which amounts to around $207,000, according to current prices. The clients can trade with each other easily by using Coincheck-hosted web interface.
The exchange has also announced that the working hours will be from 10:00-15:00. Meanwhile, the use of Coincheck app or API trading will not be eligible, according to their blog post. Coincheck has also stated that the new service will allow swift trading of large volumes of Bitcoin, while it will also consider adding support for altcoins in the future.
While the Coincheck move is one of the most impactful ones in Japan, it is far from being the only exchange that started providing OTC services. The largest crypto exchange in the U.S., Coinbase, also launched its own OTC service targeting institutional investors. However, Coinbase did it back in November 2018, and it already went through the process of becoming a completely regulated broker-dealer.
Meanwhile, while the Coincheck move is still of great importance to the crypto industry, it remains questionable whether the exchange will be able to attract clients. The reason for this is a massive hacking attack that occurred back in January 2018, when the exchange was robbed of around $532 million in crypto.
However, the exchange was then acquired by Monex Group — a well known Japanese broker — in mid-April 2018. The broker then rehauled its shareholder composition, as well as management. Additionally, the broker took a number of steps to resolve the security issues, and improve the trading systems.
Coincheck finally resumed trading in mid-November, and it also joined the Japan Network Security Association, in hopes of restoring its reputation. The exchange finally received an operating license from Japan’s regulator, the FSA, come December 2018.