Japanese Exchange Loses Record $530 Million in Cryptocurrency

Coincheck Inc., the operator of one of Japan’s leading trading platforms for cryptocurrencies has announced a loss of $530 million in customer assets due to hacking.

About $530 million dollars' worth of the cryptocurrency called NEM disappeared from the virtual exchange at around 3:00 a.m. Friday because of unauthorized access by someone outside the system, the operator said, adding that it had notified the Financial Services Agency and the police.

Sales and withdrawals of the currency were halted after the company became aware of the situation, over 8 hours after the incident. Dealings in most other cryptocurrencies were later restricted, too.

The Coincheck exchange says it is assessing the impact on its finances as well as considering compensation because the assets belonged to customers.

At a Friday night news conference, Coincheck President Koichiro Wada bowed and apologized for causing trouble to clients and relevant parties, saying that the company may seek financial assistance.

Coincheck Confirms Crypto Hack Loss Larger than Mt Gox https://t.co/pecPNOUr27 pic.twitter.com/vImLoCAdJz

— CoinDesk (@coindesk) January 26, 2018

​​Officials are looking into what happened and do not yet know when trading will resume.

The reported loss tops the 48 billion yen that Mt. Gox, a Japan-based Bitcoin exchange, lost in 2014.

If used correctly, cryptocurrencies provide high levels of security and anonymity through utilizing blockchain technology. Some governments around the world, however, have voiced their concern over the latter, amid fears that criminals might take advantage of such anonymity.