Ten Risks for Bitcoin and Other Digital Currencies


[color=red][b]Data Breach – Coincheck largest crypto-currencies exchange for Japan impacted

Authorities are investing a possible $500,000,000 theft in crypto-currencies as reported below.

Coincheck: World’s biggest ever digital currency ‘theft'[/b][/color]

One of Japan’s largest digital currency exchanges says it has lost some $534m (£380m) worth of virtual money in a hacking attack on its network Coincheck suspended deposits and withdrawals for all crypto-currencies except Bitcoin as it assessed its losses in NEM, a lesser-known coin. If the theft is confirmed, it will be the largest involving digital currency.

Another Tokyo exchange, MtGox, collapsed in 2014 after admitting that $400m had been stolen from its network. The stolen Coincheck money was said to be kept in a “hot wallet” – a part of the exchange connected to the internet. That contrasts with a cold wallet, where funds are stored securely offline. Coincheck says it has the digital address of where the money was sent and is going to do what it can to compensate investors. “It’s worth 58bn yen based on the calculation at the rate when detected,” he said at a press conference at the Tokyo Stock Exchange.

Coincheck was still examining how many customers had been affected and trying to establish whether the break-in had been launched from Japan or another country. “We know where the funds were sent,” Mr Otsuka added. “We are tracing them and if we’re able to continue tracking, it may be possible to recover them. But it is something we are investigating at the moment.” Coincheck reported the incident to the police and to Japan’s Financial Services Agency.