Coincheck, one of the biggest cryptocurrency exchanges in Japan, confirmed that it may have suffered the worst hack in crypto history when 500 million NEM tokens were stolen from its trading platform this morning. The estimated value of coins stolen is $400 million, an amount that is larger than the value of tokens lost in the Mt. Gox crash, which also occurred in Japan. (See also: Bitcoin Mass Hysteria: The Disaster That Brought Down Mt. Gox.) 

“At 3 am (1800 GMT) today, 523 million NEMs were sent from the NEM address of Coincheck. It’s worth 58 billion yen based on the calculation at the rate when detected,” co-founder Yusuke Otsuka said at a press conference. He said the company was still evaluating the effect of the hack on customers. 

Coincheck stopped trading, withdrawal, and deposits of XEM, NEM’s cryptocurrency, at 04:00 UTC this morning. This was followed by a similar suspension of trading for all cryptocurrencies, except bitcoin. Posts on Reddit speculated that a theft might the reason behind the company’s actions even as Coincheck said it was working on a “detailed announcement.” 

Coincheck customers have gathered at Coincheck’s headquarters to get more information. According to a tweet posted (in Japanese) by Nikkei Veritas, Coincheck may compensate customers for the hack. 

Japan legalized cryptocurrencies in 2017. As part of the process, it instituted capital controls and security checks for exchanges in order to qualify for a license. Coincheck had applied for a license and is under supervision by the FSA, according to Bloomberg. (See also: Bitcoin Mining Market Hacked: $70M Stolen from NiceHash.)

It is difficult to ascertain the impact of the loss of Coincheck’s trading volumes on the overall cryptocurrency ecosystem. According to a post in January 2017, the exchange had 76,400 users. But that number must have increased, given the Japanese government’s moves to legalize cryptocurrencies. The exchange’s trading volumes do not seem to be significant enough to merit a mention on websites that track such data.

A Coin Telegraph article last week surmised that trading volumes at exchanges in Japan are artificially pumped up through internal buy-and-sell operations to attract investors.

XEM's price crashed by as much as 20% this morning before recovering slightly. As of this writing, it is trading at $0.84, down 9.71% in the last 24 hours. (See also: Top Non-Bitcoin Altcoin Portfolios For 2018.) 

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