Coincheck to Start Paying Back Victims of $500 Million Heist

Coincheck said it will start compensating users who had their cryptocurrency stolen beginning as soon as next week, according to Bloomberg.

All of the 260,000 users impacted by the theft of NEM coins in the Jan. 26 theft will be reimbursed according to conversion rates detailed by Coincheck after the attack, the Tokyo-based company said at a news conference. Yusuke Otsuka, Coincheck’s chief operating officer, told reporters that the exchange has bolstered its security measures and is working to compensate users. Customers have withdrawn about 60 billion yen ($566 million) in cash since the incident, he said.

The hackers, who gained entry into Coincheck’s systems using malware on an employee’s computer, made off with about $500 million worth of digital tokens. That made it one of the biggest heists in history, raising questions about security of cryptocurrencies around the world. Since then, Japan’s Financial Services Agency has taken steps to crack down on exchanges. It still isn’t clear who was behind the attack, although there are signs that some of the funds are starting to show up on other exchanges.

Two days after the hack, Coincheck announced it would use company funds to reimburse all of those who lost money in the theft. Koichiro Wada, chief executive officer, said the exchange made enough money from spread trading to fund the payback, which amounts to 88.549 yen for each of the 523 million stolen NEM coins.

Since the theft, NEM prices have plummeted and were trading at about 30 cents before Coincheck’s announcement. That means that the traders who will be reimbursed will be payed about $440 million. That’s $262 million higher than the current market value of the stolen coins.