Hacked Japanese exchange Coincheck is getting ready to start compensating its customers next week as it plans to resume operations. The exchange has been slapped with two business improvement orders so far by Japan’s financial regulator and may stop trading some cryptocurrencies for safety reasons.
Repayment Beginning Next Week
Major Japanese cryptocurrency exchange Coincheck announced on Thursday that it will start compensating customers next week, according to Nikkei. The exchange was hacked on January 26 and lost approximately 58 billion yen (~USD$550 million) worth of the cryptocurrency NEM, held by approximately 260,000 customers. The incident forced the company to suspend nearly all of its services.
Coincheck’s repayment plan revealed on Thursday is in line with the company’s announcement in February, according to COO Yusuke Otsuka. The exchange has promised to repay victims 88.549 yen for each of the NEM coins stolen, which is a total of 46 billion yen. However, some are criticizing this decision, demanding compensation of the full amount at the time of the hack.
The exchange is also repaying victims in Japanese yen, rather than in cryptocurrency, adding that the funds will appear in customers’ accounts starting next week. Meanwhile, multiple lawsuits have already been filed against the company by victims for the return of their cryptocurrencies.
Method of Attack
The investigation by the Japan Exchange Group (NEC) and five financial security companies revealed that “the cause of the leakage is seen as a malware infection via email to employee PCs,” Oricon reported. Multiple Coincheck employees received the malware-laced email, Otsuka described. Once an infected link was clicked, the virus spread, leading to the NEM theft, Nikkei explained.
However, the COO cannot reveal whether the email originated from overseas or within Japan. “I am under investigation and I cannot reveal it,” the news outlet quoted him saying. Emphasizing that cryptocurrencies will be stored in cold wallets going forward, he detailed: