Crypto Exchange Coincheck Hackers Start Moving Stolen XEM Tokens

Crime, News | January 31, 2018 By:

Hackers who stole 523 million units of XEM from Japanese crypto exchange Coincheck are reportedly trying to off-load some of the stolen coins across multiple exchanges.

Last week, Coincheck reported that about $400 million USD in XEM tokens have been stolen. The exchange said on Sunday it would use company funds to reimburse the approximately 260,000 affected customers to the tune of 88.549 yen (82 US cents) per token stolen, approximately its market value.

Japan’s Financial Services Agency (FSA) said on Monday it has ordered Coincheck to launch an investigation into its security vulnerabilities that led to the hack, and to submit a report for management improvement to the authority by February 13. It also said that it was not clear if Coincheck had enough cash to cover the theft, despite saying it would reimburse customers.

Following the hack, the NEM Foundation, which is behind the XEM cryptocurrency, created an automated tagging system that will follow the stolen coins and tag any account that receives tainted funds.

Jeff McDonald, vice-president of the NEM Foundation, said NEM was able to track the stolen XEM tokens to an unidentified account and that the person or people behind it were trying to sell the coins on six different exchanges.

“The hackers are trying to spend them on multiple exchanges,” said McDonald. “We are contacting those exchanges.”

The hackers reportedly started sending out stolen coins to random accounts in 100 XEM batches, worth about $83 each. McDonald said the hackers were unlikely to try to spend anything close to all of the stolen cryptocurrency at once, because the “market simply couldn’t absorb that much.”

“If the hackers successfully moved the coins to an exchange, they were likely to try to swap them into another cryptocurrency before transferring the coins back into a conventional currency,” he said. “That would make the funds difficult or near impossible to trace. I would assume that they are going to get away with some of the money.”