The Japanese cryptocurrency exchange Coincheck has been attacked by a group of hackers, who achieved to find a breach in exchange's hot wallets and steal at least $500 million in XEM.

Rumours about a possible hacker attack on CoinCheck began to circulate after the exchange had stopped depositing, withdrawals and trading of XEM (NEM) tokens.

"Depositing NEM on Coincheck is currently being restricted. Deposits made to your account will not be reflected in your balance, and we advise all users to refrain from making deposits until the restriction has been lifted. We are also currently halting sales and purchases of NEM," CoinCheck wrote in its blog.

While the exchange remained silent on reasons for such a decision, customers reported evidence that large sums of XEM and also Ripple had been suddenly withdrawn from the CoinCheck accounts. Thus, on 26 January it can be seen that 523,070,767 XEM and 101 265 057 Ripple coins were moved outside the CoinCheck hot wallets. At the current rate, the stolen amount equals to more than $600 million.

 

The hacker attack was later confirmed by the NEM Foundation president Lon Wong, who said:

“This is the biggest theft in the history of the world. As far as NEM is concerned, tech is intact. We are not forking. Also, we would advise all exchanges to make use of our multi-signature smart contract which is among the best in the landscape. Coincheck didn't use them, and that's why they could have been hacked. They were very relaxed with their security measures.”

CoinCheck, one of the largest Japanese cryptocurrency exchanges, which is though not licensed by the Japanese Financial agency (FSA), held a press conference in Tokyo, where it admitted that the platform was attacked by a group of hackers. They found a breach in their security system and emptied hot wallets, stealing $500 million of tokens. Still, it remains unclear whether they had withdrawn only XEM or other cryptocurrencies as well.

It is another case for the crypto-community to consider risks related to centralized exchanges. One of the ways to resolve system problem is to make decentralized exchanges viable.