A Japanese cryptocurrency exchange has claimed it lost more than $400 million in tokens following an alleged hack on its service.
Coincheck said Friday that some 500 million tokens of NEM, worth around $400 million at the time of writing, according to comments at a press event attended by Bloomberg.
Thos apparent heist is larger than the Mt. Gox hack in 2014 in terms of the U.S. dollar value, but its impact it is unlikely to have a significant impact on the market given the sheer number of cryptocurrencies and the increased value of bitcoin.
However, the incident is a reminder of the risk of leaving tokens inside an exchange rather than a more secure option such as a personal wallet or hardware-based option. It’s the latest in a string of recent incidents affecting cryptocurrencies.
Coincheck said it doesn’t know exactly how its service was compromised. It is said to be considering compensating users who were affected.
Japan is the first country to license crypto exchanges, with its first 11 licenses handed out in September. Coincheck had applied for a license but it is currently awaiting a decision.
NEM Foundation President Lon Wong said his organization is doing “everything we can to help.”
Speculation started on Friday 26tH Jan when the exchange halted the sale, purchase and withdrawal of NEM tokens from its exchange. Coincheck later confirmed the losses and held a press conference to provide more details.
The price of NEM dipped from a high of $1.01 on Friday to reach $0.83.