CoinCheck is one of china’s biggest exchanges processing billions in transactions on a daily basis. However, it was recently announced that the exchanges NEM hotwallet had been emptied in a recent hack. Worth a excess of $530 Million, the hack is one of the biggest in recent memory, is set to leave thousands of Customers and investors out of pocket.
With no new information being revealed to the public by the exchange, details on the execution of the hack remain private. However CoinCheck has assured users and the public it will cooperate with state investigations by the Japanese Financial Services Agency.
“It was hard for us to manage cold wallet,” the CoinCheck team said.
The impact on the NEM markets has also been profound with the value of the token dropping well over 10% since the announcement. Trading volumes have also increased sharply from $50 million to over $160 million as many have begun panic selling seeing the market cap slashed. The developers behind the altcoin, NEM , have also announced there will not be a hardfork of the chain essentially leaving the stolen funds in the hands of the hackers.
To conclude, the hack one of the largest in recent history further proves that no exchange is invulnerable to being breached if the right protocols are not put into place. With the exchange being called out by a number of investors for storing such large quantities of token in a hotwallet, the importance of offline storage has been highlighted.
The practice, which while time consuming, ensures complete protection as a offline wallet is usually one which is created and stored on a computer with no connection to a network. With the exception of physical tampering and offline transmission of malicious code, this remains the best defense exchanges and individuals have to secure themselves and their assets.
NairaEX remains one of the most secure exchanges in Nigeria with no reported breaches and a fast turnover of transactions, users are ensured their funds are exposed to minimal risk while being processed.