For many of Japan’s residents, cryptocurrency heists seemed more like something from the past. Japan has been a victim of the world’s worst cryptocurrency heists. Regulations and the intervention from the Japanese government brought an end to this era. Coincheck’s hack has taken place less than four years since the infamous Mt Gox hack that crippled the world’s largest exchange. Less than four years after Mt. Gox hack, Coincheck has lost $534 million XEM.
Coincheck’s Hack Is the Latest Attack on Japan Cryptocurrency Exchanges
News of Coincheck’s hacking, and the loss of approximately $534 million at the exchange is once again putting Japan global spotlight, and for all the wrong reasons. The loss of cryptocurrency through hacking of client and exchange wallets earned Japan a bad rep less than half a decade ago. Through the regulations of the country’s crypto market, Japan was able to restore sanity to its digital asset industry, earning the nation praise globally. Only this week, the Bank of Japan slightly endorsed the use of bitcoin.
On Friday, January 26th, more than 127 million Japanese citizens woke to the news of another cryptocurrency heist. Confirmed reports reveal that at around 3 AM local time, a hacker was able to withdraw all the NEM Coincheck was holding. It is not known whether Coincheck lost its NEM through a hack masterminded by an individual or group.
While the identity of Coincheck’s hacker remains unknown, surfacing information suggests that the hacker was able to take advantage of the flaws present Coincheck’s security protocol. The use of a hot wallet that does not have multi-sig is to blame for the loss of $534 million XEM.
Similar to the Mt Gox hack, the hacker accessed Coincheck’s NEM using a vulnerability that stems from using wallets that do not have the multi-sig feature. Mt Gox lost more than 850,000 bitcoins in the 2014 hack.