Blockchain Intelligence Group Traces Coincheck’s Stolen XEM Tokens

Announcements, Crime, News | March 6, 2018 By:

Blockchain Intelligence Group (BIG), a developer of blockchain search and data analytics solutions, has traced some of the XEM tokens stolen from Japanese cryptocurrency exchange Coincheck to a crypto exchange in Canada.

In January of this year, Coincheck lost over $400 million in XEM tokens to hackers. BIG’s Forensic and Investigations Division has now traced the proceeds to a Vancouver-based exchange where funds are being laundered out.

BIG president and co-founder Shone Anstey said some of the stolen coins are being converted to other cryptocurrencies and then possibly sent back to Japan. He declined to name the exchange, give the amount or the destination in Japan, but said the findings will be turned over to law enforcement.

BIG said it used a combination of public ledger information available to anyone and proprietary know-how to trace the coins.

“We felt it was a significant amount that warranted looking into,” Anstey said. “They are trying to move it before the door is closed, but there is a lot to move.”

Big will compile the information gathered from its suite of proprietary technology search and data analytics tools into a comprehensive, official report outlining its forensic findings – for delivery to law enforcement agencies in Canada and the US.

The Japan Communist Party Central Committee’s newspaper also reported that more than 24 million coins from the hack have ended up in Zaif, a Japanese NEM exchange. The newspaper said that since Tech Bureau, the operator of Zaif, is registered with the Financial Services Agency (FSA), it is obliged to confirm a customer’s identity, which can “help to clarify the identity of the criminals.”

Days after the hack, NEM developers created a tracking tool that would let exchanges to automatically reject stolen funds. 11 addresses have been labeled with a tag that reads “coincheck_stolen_funds_do_not_accept_trades : owner_of_this_account_is_hacker.”

Late last month, 132 crypto investors filed a lawsuit against Coincheck, seeking 228 million yen (around $2M USD) in damages.