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Coincheck Faces Pressing Questions in the Wake of the World’s Biggest Hack

January 27, 2018 |

Coincheck Faces Pressing Questions in the Wake of the World’s Biggest Hack

It was, by any reckoning, a huge haul. Between $ 400 million and $ 534 million dollars of NEM stolen, depending on whether you go on its value at the time or once the market had reacted to the news. At a press conference on Friday afternoon, the stunned Coincheck team painted forlorn figures as they came to terms with being on the receiving end of the greatest heist of all time. In the inevitable post-mortem, questions have been raised about the security practices of the Japanese exchange.

Also read: Coincheck Halts Operations Amidst Hacking Rumors

Gox II: Goxxed Harder

Coincheck Faces Pressing Questions in the Wake of the World’s Biggest HackJapan thought its days of being the focal point for record-breaking cryptocurrency heists were behind it. Less than four years on from the Mt Gox hack, which heralded the end of Japan’s and the world’s largest exchange, the country is back in the spotlight. Over the past few years, Japan has earned praise for its measured approach to cryptocurrencies, having encouraged their use in a regulated environment. Only this week, the Bank of Japan gave crypto a mild endorsement. But on Friday January 26, the nation’s 127 million citizens awoke to the news that another seismic cryptocurrency hack had occurred on home soil. At around 3am local time, someone withdrew all of the NEM held by the exchange in a single transaction.

The identity and origin of the hacker is unknown at this time, but what few details have emerged suggest serious flaws in Coincheck’s security procedures. It appears that the 500 million NEM were stored in a hot wallet with no multi-sig. If so, the exchange has learned nothing from recent history, for it was a similar setup that resulted in Mt Gox losing around 850,000 bitcoins in 2014. At a press conference on Friday, when asked about Coincheck’s security practices, there was an awkward pause before president Wakata Koichi Yoshihiro batted the question away, electing to issue an apology instead.

The Coincheck Hack by Numbers

The magnitude of the Coincheck hack, a haul which exceeds any other, can be seen by comparing it alongside real world record-breakers.

Securitas Depot Robbery, $ 83 million: Disguised in wigs and prosthetics, a gang did over a security depot in Britain in 2006. They would have made off with more, only there was no more space for cash in the lorry. The Securitas robbery was worth one sixth of the NEM hack.

Knightsbridge Security Deposit Robbery, $ 97 million: A safety depot raid in London in 1987 netted a huge load of cash and jewelry but it was still only worth a fifth of the NEM cryptocurrency hack.

Coincheck Faces Pressing Questions in the Wake of the World’s Biggest HackBaghdad Bank Heist, $ 282 million: Iraq’s Dar Es Salaam bank was relieved of hundreds of millions of dollars in 2007, with two guards alleged to be the instigators. The bumper robbery was worth around half the NEM stolen from Coincheck.

Mt Gox, $ 450 million: The tranche of bitcoins stolen from the world’s largest cryptocurrency exchange in 2014 was worth around $ 80 million less than the value of NEM that was taken.

An Irredeemable Fortune

In reality, the thief may find themselves struggling to shift their hot property. Within hours of the attack occurring, the NEM team had contacted cryptocurrency exchanges seeking to have the wallet address blacklisted. One thing NEM won’t be doing is emulating Ethereum and hard-forking. If the blockchain were to be rolled back and the stolen coins forked away, it would do Coincheck a favor, but would do little to demonstrate the immutability of blockchain ledgers.

Coincheck Faces Pressing Questions in the Wake of the World’s Biggest Hack
NEM’s president is against a hard fork.

Japan’s Financial Services Authority has confirmed it is “looking into the facts” surrounding the matter. Meanwhile, Coincheck has promised that it is seeking to compensate its customers who had their NEM stolen. Despite its hefty dollar value, the NEM hack is unlikely to put a discernible dent in the cryptocurrency markets. It raises serious questions though about Coincheck’s fitness to operate a cryptocurrency exchange.

Coincheck Faces Pressing Questions in the Wake of the World’s Biggest Hack

The company had previously reported being approved by the Financial Services Agency, but it’s emerged that Coincheck was not registered with the FSA. The only way for Coincheck to pay back its customers may be for it to be allowed to continue trading. Whether regulators will allow the beleaguered exchange to stay in business – and whether customers will trust it again – is another matter entirely.

Do you think Coincheck should keep trading or wind up its operations? Let us know in the comments section below.

Images courtesy of Shutterstock, Twitter, and Coincheck.

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The post Coincheck Faces Pressing Questions in the Wake of the World’s Biggest Hack appeared first on Bitcoin News.

Bitcoin News


Bella Thorne, Vile and Tone Deaf in Wake of Fatal Montecito Mudslides

January 11, 2018 |

Bella Thorne may get the award for the most self-absorbed celebrity after going off that the mudslides inconvenienced her because the debris is blocking her from attending her boyfriend’s concert. Thorne tweeted, then deleted this: Rob Lowe, who…

Crypto Card Issuers Seek Solutions in the Wake of a European Ban

January 8, 2018 |

Crypto Card Issuers Seek Solutions in the Wake of a European Ban

Intervention by Visa spelled an end to European crypto debit cards for the majority of customers on Thursday. Around a dozen crypto companies were affected by the shutdown, which instantly wiped out their services across Europe. Issuers such as Bitwala, Tenx, Bitpay, and Xapo were left high and dry after a Visa subsidiary stopped processing payments. Two of the companies affected have since spoken to, revealing their plans to find an alternative solution.

Also read: Visa Veto Leaves Several European Cryptocurrency Cards Locked Out

Crypto Card Holders Are Locked Out

On Thursday, reported on a sudden crackdown on crypto cards within Europe, orchestrated by Visa subsidiary Wavecrest. The report explained how “the prepaid cards, which have become extremely popular in the crypto community, provide a means of indirectly paying for goods and services using cryptocurrency.”

Bridging the gap between fiat and crypto is one of the biggest challenges cryptocurrency platforms face. Hybrid cards, which allow a debit card to be funded with crypto and then used to make purchases in the local fiat currency, were seen as a smart solution. That all changed this week when hundreds of thousands of European crypto-holders found their cards had been rendered useless.

Crypto Card Issuers Seek Solutions In the Wake of a European Ban

Tenx was one of those companies affected by the ban. The company’s co-founder, Dr. Julian Hosp, told that around 200,000 customers had been impacted, but signaled that a resolution is on the horizon:

Tenx was prepared for this, as the company has recently entered partnership  with a new card issuing partner and is in the process of getting the new cards live to replace the old ones as soon as possible. Meanwhile, Tenx customers will be able to withdraw their funds from their accounts as of Monday evening (January 8), while they await developments.

Dr Hosp also appeared on a live Hangout on Saturday to explain more about the current situation. The company’s co-founder seems upbeat, telling of plans to introduce a “live virtual currencies card” and obtain a banking licence for better fiat currency integration.

The Hunt for a New Issuer

Wirex is another crypto card firm that finds itself without a payment processing partner after Visa slammed the door. The company claims to be Wavecrest’s largest client, with over one million customers – most of whom don’t use crypto cards, it should be noted. Nevertheless, the effects of the Visa veto were still dramatic: around 600,000 Wirex plastic or virtual card holders were left without service after the ban.

Crypto Card Issuers Seek Solutions In the Wake of a European BanInterestingly, Wirex CEO Pavel Matveev asserts that Visa are blameless in this, insisting that the blame lies solely with Wavecrest. He told “Wavecrest have been violating Visa rules for months…it’s 100% Wavecrest’s fault and they knew it was coming a couple of months ago.”

Like Tenx, Wirex is confident the situation won’t leave its European customers serviceless. Pavel says they have four alternative issuers to choose from, one of which is based in Europe. “For us,” he said, “it’s a question of switching issuer and re-issuing cards, so it’s just a temporary problem; but for a lot of companies it’s the end of their business – they don’t have an alternative issuer and finding one plus integration might take anyway from 6 to 18 months”.

Who’s to Blame?

Crypto Card Issuers Seek Solutions In the Wake of a European BanSome in the cryptocurrency community were swift to point the finger at Visa in the aftermath of the ban, though there is no evidence as yet that the order came from up high. Given that it processes more than 100 billion transactions a year versus bitcoin’s circa 130 million, it’s premature to assert that Visa is feeling threatened by cryptocurrency. Whatever bitcoin is, be it a store of value or a medium of exchange, it is not, as yet, a Visa killer. Nor is Visa, or its subsidiary Wavecrest, a crypto killer.

It seems likely that the majority of European card issuers will be able to resume service in the near future. Customers will be wary, though, of putting all their faith in one crypto card, in the knowledge that a repeat of the Wavecrest incident could see service suspended at any time.

Do you think Visa are culpable, or was this matter none of their doing? Let us know in the comments section below.

Images courtesy of Shutterstock.

Tired of those other forums on the subject of Bitcoin? Check

The post Crypto Card Issuers Seek Solutions in the Wake of a European Ban appeared first on Bitcoin News.

Bitcoin News


Rose Parade to Display Massive Police Presence in Wake of Vegas Massacre

December 27, 2017 |

Authorities responsible for the Rose Parade have the Vegas massacre on their minds — in fact, front and center — TMZ has learned. Law enforcement sources say the Parade is now a national matter … authorities from the Pasadena as well as…

NYPD to use secret weapon at Thanksgiving Day Parade: ‘Vapor Wake’ retrievers

November 23, 2017 |

Less than a month after the terrorist attack by an Islamic State sympathizer in lower Manhattan that killed eight, authorities in New York are doubling down with unprecedented security measures ahead of the Macy’s Thanksgiving Day Parade.
FOX News

Business travelers return to Las Vegas in the wake of mass shooting, resort operators say

November 12, 2017 |

Las Vegas’ convention and meeting business seems to be rebounding following a mass shooting in the city on Oct. 1, according to operators of two of the city’s biggest casinos and resorts.

The city is one of the nation’s most popular spots to hold conventions, trade shows and business meetings,…

L.A. Times – Business

Faith Hill, Tim McGraw Speak Out in Wake of Vegas Shooting

November 11, 2017 |

In the wake of last months deadly shooting in Las Vegas, Tim McGraw and Faith Hill are speaking out in favor of gun control—an unusual move for country stars, USA Today reports. “Look, I’m a bird hunter,” McGraw tells Billboard . “However, there is some common sense that’s necessary when…

In the wake of mass killing, Las Vegas reaches out to tourists with a new ad

October 12, 2017 |

Ten days after a mass shooting killed dozens and injured hundreds in Las Vegas, the city that thrives on tourists, gambling and good times launched an ad to encourage visitors to return.

The new ad, released Wednesday by the Las Vegas Convention & Visitors Authority, features photos and Twitter…

L.A. Times – Business


Catalonia: Spaniards wake up to a week of uncertainty

October 9, 2017 |

Spaniards woke up Monday facing a week of political uncertainty, with Catalan regional leader Carles Puigdemont expected to declare independence from Spain within a matter of days. – RSS Channel – World


Common Praises Colin Kaepernick in Wake of President Trump’s NFL Bashing

September 23, 2017 |

Common’s responding to President Trump’s bashing of “son of a bitch” NFL players who take a knee during the anthem by going another route — calmly praising the man who did it first as a hero. We got the rapper at LAX Friday night, shortly after…