Another cryptocurrency heist occurred this weekend. A Japanese crypto exchange lost over $400 million to hackers, becoming one of the largest thefts of digital currency to date.
The company, Coincheck, issued a statement that it plans to use its cash to reimburse everyone who had their money stolen, which equals around 260,000 people.
Coincheck shared that on Friday it discovered an unauthorized access of the exchange and made the decision to suspend trading for all cryptocurrencies except for Bitcoin.
The company explained that its NEM coins, the ones stolen, were kept in a hot wallet instead of the more secure cold wallet, which is kept offline, because of technical problems and a shortage of staff capable of handling them.
The loss that Coincheck experienced this weekend greatly exceeds that of MtGox back in 2014. That heist resulted in MtGox losing 850,000 coins, worth $480 million. That particular loss resulted in the collapse of the Tokyo-based Bitcoin exchange.
The demise of MtGox’s failed to lessen the enthusiasm for digital currencies in Japan, which became the first country to officially recognize cryptocurrencies as a legal form of money last year.
Around 10,000 businesses in Japan are believed to accept Bitcoin, and BitFlyer, the country’s largest Bitcoin exchange, saw its user base surge past 1 million last year.
Major newspapers in Japan have expressed their grievances with Coincheck, stating that the handling of digital currencies by the exchange was sloppy. The newspapers continue by stating that the company was putting safety second and focused more on growing its business. Furthermore, the Financial Services Agency is expected to take action against Coincheck soon.
The politicians who met last week at the World Economic Forum in Davos discussed the dangers surrounding digital currencies, and the US Treasury secretary voiced further concerns about cryptocurrency being used for illegal transactions.