All eyes are on the exchange of Japanese cryptocurrency. Coincheck as a result of what has become the biggest piracy of virtual history – eclipsing the Mount. Gox hacker of 2014.

According to Reuters, Coincheck submitted its report to the Financial Services Agency (FSA) of Japan on Tuesday, February 13 on the hack in January that saw more than $ 500 million worth of NEM coins Stolen to the Exchange

On January 26, $ 534 million of NEM coins were stolen by hackers in a number of transactions from the address. The funds belonged to the exchange’s clients, who were stored in a “hot” portfolio online.

According to Coincheck officials, the private key was stolen, allowing a total of 523 million coins to be transferred. wallet. Questions were quickly raised about security measures taken by the Japanese Stock Exchange to store cryptocurrencies.

Coincheck was a two-week period for Coincheck – because it allowed to trace the stolen NEM coins while developing a plan to repay 260,000 users affected by the hacking.

The chronology of events tells the story, but there was much more in the wake of massive piracy.

Chronology:

  • Friday, January 26 – 3:00 am – hackers transfer 523 million NEM coins from the Coincheck exchange to a single address
  • Friday Jan. 26 – 05:25 – Coincheck announces the suspension of deposits or withdrawals from the exchange, reporting a theft to the police and the Financial Services Agency of Japan (FSA)
  • ] Saturday, January 27 – Coincheck promises to reimburse 260,000 users affected by the NEM hack.
  • Saturday Jan. 27- NEM Development Team Excludes Hard Fork, Creates Automated Tag Tuesday, January 30 – NEM Foundation Vice President Jeff McDonald Announces Hackers Move Stolen NEM Parts to Different Addresses 100 NEM at a time – while confirming
  • Friday, February 2 – FSA visits the Coincheck offices for an inspection of the site after the hacking.
  • Friday, February 2 – The FSA orders Coincheck to submit a report on the incident and a proposal for improvement of the systems by February 13.
  • Friday, February 9 – Coincheck announces that some users will be able to make withdrawals in Japanese Yen for the first time since freezing transactions on February 13.
  • Monday, February 12 – 10 traders announce plans to sue Coincheck for stolen funds.

Hackers bamboozled

Coincheck once realized that the NEM tokens had been stolen. quickly stopped all deposits and w withdrawals on the exchange. After reporting the incident to the authorities, the exchange has moved into damage control.

In what could be described as a lucky chance, a complete full range was excluded after the hack due to the nature of the flight. Because the NEM coins were stolen due to bad stock measurements and not a Blockchain flaw, the developers looked for a different solution.

The NEM team created a tagging system that would flag all NEM tokens. stolen during the hacking.

Once the pirates started moving the stolen funds a few days later, 100 NEMs at a time to different addresses, Coincheck was able to track the coins. Due to the track of funds, hackers did not even try to sell the NEM coins tagged.

The movement effectively renders the stolen coins useless, because they will be reported if the users try to cash

Despite the good faith evidence, some users sue

The day after the hacking, Coincheck promised to reimburse all users affected by the hacking of his own capital. The exchange has ruled out the bankruptcy statement, citing its efforts to be fully recognized by the FSA as a registered cryptocurrency exchange provider.

On Tuesday, February 13, the Nikkei confirmed that some users were allowed to withdraw yen. for the first time since the hack two weeks ago. According to reports, investors want to make withdrawals worth 30 billion yen.

Meanwhile, Reuters also reported that 10 investors were planning to sue Coincheck later this week.

Using a Hot Wallet Slammed

In the wake of the hack, Coincheck was slammed for storing NEM coins in a “hot wallet”. , which is an online portfolio. Good cryptocurrency practices almost require that large amounts of cryptocurrency be stored in a cold storage, material wallet.

With access to the wallet’s private key, hackers simply moved funds from Coincheck.

Report submitted to the FSA

All of these details were of great concern to the FSA, which visited the Coincheck offices on Friday, February 2nd. There were contradictory reports by various media, some Nevertheless, the Japanese authority ordered Coincheck to submit a full report on the incident, including a review of security measures before piracy, and what would be done to improve security in order to prevent similar incidents from occurring in the future.

Reuters reported that Coincheck submitted its report to the FSA this morning.

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