Coincheck Will Pay Back NEM Owners After Hacking

Coincheck exchange, that was hacked and lost about $540 million late in January, said yesterday that it will start to repay 260,000 owners starting from next week.

Tokyo-based Coincheck Inc. plans to tap into its own funds to pay 46 billion yen into the owners’ accounts.

The company also pointed that it will restart the part of its trading from next week.

The director of Coincheck Yusuke Otsuka said in a news conferency, that they are deeply reflecting on the suspension of their services.

The company also disclosed why such a massive amount of virtual currency NEM was illicitly transferred.

The firm reports, that one of exchange’s personal computers was infected with a computer virus through an e-mail, and the computer was remotely operated.

A crypto key for an account holding clients’ assets was stolen, and NEM was remitted to outside accounts.

Coincheck was criticized for keeping its computer system for managing clients’ assets connected to the Internet, after the theft. The company will pull the plug on the Internet connection from current moment. It also will enforce measures to restrict access from the outside.

In December 2017, the exchange’s monthly trading had reached about 3.8 trillion yen, a month before the hacking.

Coincheck President Koichiro Wada said, that manpower in computer systems and other divisions were insufficient.

The Financial Services Agency issued its second order to Coincheck yesterday to improve business operations. The company will submit a business improvement plan by March 22 in response.

The FSA plans to strictly monitor Coincheck even after the firm pays the money back to its owners and resumes part of trading.