Coincheck, the cryptocurrency exchange hacked on January the 26th announced that it will refund the investors that lost their NEM. The company has been hacked and lost 523 million NEM coins, worth around $500 million dollars. On January the 27th, the company has released a statement explaining how it will refund investors.

Coincheck Refunds Investors

The company has announced that it is going to use its savings in order to refund investors that lost their NEM. Approximately 260,000 users were affected by the illicit transfer of NEM.

The users will be repaid in JPY via Coincheck Wallet based on the XEM/JPY rates provided by the cryptocurrency exchange Zaif. According to the company, this cryptocurrency exchange manages the most trading volume of NEM domestically and internationally. All reparations will be made in JPY currency.

The company informed that they have not decided the best method for applying for reparations and the period in which they will be made.

Coincheck Hack NEM

Coincheck

The statement reads as follows:

“We realize that this illicit transfer of funds from our platform and the resulting suspension in services has caused immense distress to our customers, other exchanges, and people throughout the cryptocurrency industry, and we would like to offer our deepest and humblest apologies to all of those involved.”

In addition to it, the company is using its resources in order to find the NEM lost. Furthermore, a NEM spokesperson has informed that they are developing a system to track these funds.

“NEM is creating an automated tagging system that will be ready in 24-48 hours. This automated system will follow the money and tag any account that receives tainted money. NEM has already shown exchanges how to check if an account has been tagged.”

MtGox Not This Time

The cryptocurrency market did not even felt this situation as it happened when the MtGox hacked occurred. As the cryptocurrency market keeps growing, it will be more difficult for a single hack to affect its performance. In order to have a similar reaction in the markets as when MtGox ceased its operations, a multiple simultaneous hack must be performed in different important cryptocurrency exchanges.

It would be difficult to perform such a task, and even when it is possible, funds are stored in Cold Storage wallets. Coincheck was not using cold storage wallets and some of its funds are not even stored in multisig wallets.

In order to improve the security now and for its future, Coincheck will have to change the way it stores the cryptocurrencies of its customers.

The statement finishes in this way:

“In moving towards reopening our services, we are putting all of our efforts towards discovering the cause of the illicit transfer and overhauling and strengthening our security measures while simultaneously continuing in our efforts to register with the Financial Services Agency as a Virtual Currency Exchange Provider.”

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