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Japanese Cryptocurrency Exchange Coincheck set to Reimburse Users who Lost Money in the $400 million Hack

Jan 29, 2018 Posted /  3880 Views

Japanese Cryptocurrency Exchange Coincheck set to Reimburse Users who Lost Money in the $400 million Hack

Japanese exchange will compensate clients using internal funds

The tokyo based exchange bureau announce on it’s websites that it will pay all it’s 260,000 customers who suffered losses due to the successful hack on the platform. The hackers made of with more than $523 million worth of XEM tokens from stored on the exchange servers.

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Coincheck will reimbursed customers who suffered the losses in the Coincheck portfolios in Japanese yen multiples of 88.549 yen times the number of units stored on the exchange before the attack. The exchange platform stresses that every user will be paid in full using funds from the internal funds in the company’s holdings.

According to the information of the coincheck website, weighted averages of volume will be used to calculate the price of XEMS tokens. This calculated price will be compared with the price of XEM/JPY from another exchange platform Tek Bureau Inc. the time period used in the price calculation will be taken from the difference between the time trading was suspended on coincheck and the time a statement of hacking was published that is between jan. 26 (12:09 japan time) and January 27.

Users will receive 88.549 yen for each coin that was stolen

According the calculations that will be used for repaying users for the losses they incurred during the attack on coincheck 88.549 yen will be multiplied by the amount of tokens that was stolen from the user account. Coincheck was quoted on  statement saying,

“The time and methods of how we will compensate our users who lost their money during the attack on our exchange platform is still under consideration. We will refund every users using our own funds”

It is not clear where exactly the money coincheck claims will be used for repaying its customers is coming from. Its majority shareholders and co-founders are  Koichiro Wada and Yusuke Otsuka, other investors in the platform include Tokyo-Based venture firm Anri and California Based WiL LLC. The company that started cryptocurrency exchange operations wayback in 2014 employs about 80 people in its exchange business.

The platform gradually suspended it’s services including all transactions until managers were able to confirm that a robbery had just taken place. The founder of NEM, the cryptocurrency that was stolen from the platform, Mr. Long Wong called the hacking “ the biggest robbery in the world history” but said coincheck carries all the responsibility for the attack on its platform.

Wong however state that NEM would contribute in any way to help trace the destination of the stolen funds and do everything possible to retrieve it when called upon by coincheck.

Coincheck Being partly blamed for the Attack

NEM founder wong revealed that coincheck does’t hold it’s transactions in smartcontract even though NEM recommended smart contracts for all exchanges operating on the cryptocurrency. Coincheck is also being blamed by technology reporter Yuji Nakamura for not implementing multi-signature technology a possible reason which could have simplified the hack.

Coincheck apologies for the theft on its platform, suspension of services and all other associated problems suffered by customers and promises to reactivate it’s services as soon as possible investigate the hack and improve on their overall security to prevent such setbacks in the future.

This is not the first time cryptocurrency exchange platforms are being targeted by hackers Bitfinex, shapeshift and Mt.Gox suffered similar attacks in the pass with millions of dollars left in losses to the platforms.

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Tags: cryptocurrency exchange coincheck

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