Coincheck was founded in 2012 by a company based in Tokyo, Japan. It is a blockchain network where it allows you to buy and sell Bitcoins 24/7 be it a weekend or midnight. One of the distinct feature is that it allows users to enable SMS and two-factor authentication provided by Google Apps. But this Platform created the biggest blunder in the history of Cryptocurrencies. It has lost somewhat $543 million USD worth of virtual assets to a hacking attack on its network. This is the second theft of a Tokyo based company after MtGox being the first to having $400 million stolen from its network in 2014.
Hackers has broken into the network in Friday during noon but the breach was not discovered until late night, nearly eight and a half hours later. Mr Yusuke Otsuka, the Company’s Chief Operating officer says that they know where the funds went and are currently tracing it. It may be possible to recover the stolen amount. Around 260,000 customers have been affected by this theft.
Soon after the breach was discovered, Coincheck froze all deposits and withdrawals for all cryptocurrencies except Bitcoin. When the MtGox breach happened in 2014, it recovered 200,000 Bitcoins in an old digital wallet. Meanwhile here, at Coincheck, the stolen assets were said to be kept in a ‘hot wallet’ which is opposite to a ‘cold wallet’. A cold wallet is where funds are stored securely offline and a hot wallet is a part of exchange connected to the internet.
This affected the market value of cryptocurrencies. Bitcoin dropped by 3.4% and Ripple retreated by 9.9% on Friday. We should think of cryptocurrencies as assets rather than digital cash. It can be seen that the large number of Bitcoin holders are merely investors who see this as an investing term rather than an actual wallet. We should keep our fingers crossed and hope for the recovering of this theft as Japan is a pro-crypto trading country.