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Cryptocurrency theft worth over $530 mn: Japan issues business improvement order

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  30 Jan 2018 12:00 AM GMT

Tokyo, Jan 29: A business improvement order was given on Monday to Coincheck Inc. by Japan’s fincial watchdog after the Tokyo-based virtual currency exchange said last week it had lost $532 million’s worth of NEM cryptocurrency in a hacking attack.

Japan’s Fincial Services Agency issued the order to Coincheck for not having sufficient security measures to prevent such attacks, with agency officials also saying the company has a poor standard of customer service, Xinhua news agency reported. The agency instructed Coincheck to investigate the cause of the security breach and report its future preventative measures back to it by February 13.

The losses of the NEM cryptocurrency in the Coincheck incident were the largest ever in a security breach, and the firm has been instructed by the agency to reimburse its customers.

On Friday, the virtual currency exchange halted the majority of its operations, stating later that all of its customers’ holdings of NEM coins had been stolen.

Coincheck said that 2,60,000 of its customers affected would be compensated for $422 million in cash that was lost at the time.

The coins were being stored in a digital wallet, Coincheck said, which is not as secure as an offline wallet. Coincheck had previously been warned by Japan’s fincial watchdog about storing its coins in this way.

Japan’s top government spokesperson, Chief Cabinet Secretary Yoshihide Suga, said on Monday the government was investigating the incident. Tokyo’s Metropolitan Police Department will also begin a probe into the case, he said. (IANS)

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