Sunday, November 27, 2022

Japan’s Coincheck Halts Trading and Withdrawals as Hack Rumors Spread

Japan’s Coincheck Halts Trading and Withdrawals as Hack Rumors Spread

Japanese exchange Coincheck today suspended deposits, withdrawals and trading for most cryptocurrencies and JPY, amid rumors of a possible hack and theft. The suspensions initially surrounded the NEM (XEM) token, but over the day expanded to include all purchases and sales across its platforms — excluding bitcoin (BTC). All withdrawals are also suspended, including JPY.

[Update Friday January 27th 17:00]: In a midnight press conference in Tokyo, Coincheck confirmed the rumors that 500 million NEM tokens (around $400 million USD worth depending on current value) were sent “illicitly” from its wallets.

Also read: TNABC Miami 2018 Video Report: Tracking Fine Art Ownership on Codex, With Jess Houlgrave

NEM Activity Suspended, BTC Still Trading

The first sign of trouble appeared around midday local time on Friday January 26th, as the company announced a temporary halt on trading NEM tokens. By 6PM the same day, it included credit card, Pay Easy, and convenience store payments. It followed with: “We sincerely apologize for these inconveniences and will continue to do our best to be back to normal operations as soon as possible.”

Halting withdrawals in all currencies quickly led to rumors Coincheck had been hacked.

Though it was another red day across the board on crypto asset markets, NEM was hit hardest, dropping over 18 percent in value. At press time its tokens are worth $0.77 USD. However, there are no claims of issues with NEM’s technology itself.

Lon Wong, Foundation
Lon Wong, Foundation

Lon Wong, president of the Foundation Ltd., appeared to confirm the rumors when he tweeted “It’s unfortunate that Coincheck got hacked. But we are doing everything we can to help.”

After receiving complaints from fellow Twitter users that his claim had been made hastily and without confirmation, Wong clarified: “It is public news and we need to make sure the public is well informed. I am of the opinion that it is silly to panic.”

Rumors of another multimillion dollar theft at a Japanese cryptocurrency exchange will no doubt raise the specter of Mt. Gox, which lost

Bitsonline has reached out to Coincheck for clarification, and the company has promised to make an official statement on the matter soon.

How Widely Used Is Coincheck in Japan?

Coincheck logoCoincheck is one of Japan’s longest-operating and most popular cryptocurrency exchange platforms. Its point-of-sale terminals can be seen in several venues that accept BTC payments, and it is the only major exchange in the country to offer trading in digital assets other than the select few “approved” by the Financial Services Agency (FSA).

Most Japanese exchanges offer only BTC, ETH, LTC, ETC, BCH, and local favorite Monacoin. As well as NEM, Coincheck also trades Ripple XRP, Zcash, Dash, Lisk, Monero, Augur REP, and Factom. It offers spot and leveraged trading, with margins up to 100 percent.

Coincheck was notably absent from the list of large Japanese exchanges that received official operating licenses from the FSA back in September 2017.

Bitsonline will continued to monitor this breaking story and update where relevant.

Does offering multiple token trading increase risk for crypto exchanges? Let’s hear your thoughts in the comments.

Hat tip: Mike at BitPinas, Emily Liu of Eagles+Pandas

Images via Coincheck, Twitter, Tradeview

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