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Coincheck doing the Right Thing Refunding NEM Hack Victims


Mar 16, 2018 Posted /  2774 Views


Coincheck doing the Right Thing Refunding NEM Hack Victims

Who should be Responsible for User Funds in Exchange Wallets

Keeping your cryptocurrency safely in your wallet is your sole responsibility, when someone else gains access to your wallet private keys the wallet is compromised. Users should keep their private keys as securely as possible to avoid illegal access of their wallet which could lead to loss of funds from the wallet.

In the case where the users are not directly responsible for the loss of funds from their wallets, the service provider should fairly bear the cost of the loss by refunding the customers. Luckily this is what coincheck a Tokyo based cryptocurrency exchange is doing. Some hacker managed to get himself inside of coinchecks wallet system and made off with more than $530 million in NEM cryptocurrency

In the wake of the attack many security analyst pinpointed the mistakes coincheck in failing to secure the lost digital currency. Securing user funds in the exchange wallet is solely the work of the exchange. In case funds are tampered with in the wallet without the user’s consent, users can drag the exchange to a legal battle and demand payment.

Is Coincheck Offering a favour to its customers by refunding the stolen $530 million

With the ongoing investigation in the successful heist of the $530 million worth of NEM cryptocurrency. Emerging information from the investigation revealed that a malicious email has in circulating among the exchange employees. There are about 100 policemen deployed at Coincheck premises as the investigation proceeds. The email that was circulating reportedly deployed a malware when clicked on, this enabled a remote access to the computers to some external hackers.

Coincheck bears a full responsibility for the lost fund, as investigation into the case is still going on additional information revealed that the hacked computers transmitted data to servers located in Europe and the US for several weeks before the tokens were siphoned. Coincheck cyber security team failed to identify the security breach on the core infrastructure early enough leading to the loss of the funds.

Japanese authority has mandated coincheck to submit a written business improvement plan to Japan’s Financial Services Agency by 22nd March. However the company revealed that normal traded has resumed and withdrawals had resumed on the platform including trading cryptocurrencies including ETH, ETC,XRP,LTC and BCH.

How Should Future Catastrophes be handled

It vital government to step in and establish an industry cyber security checklist which should be met by every new player entering the cryptocurrency exchange business. This will help ensure exchanges are well equipped to handle future attacks in their platforms. Industry players strive to maximize profits while reducing overheads. This makes companies ignore some vital security concerns given normal operation is going on smoothly.

Companies need to spend a significant amount of resources in upgrading their security infrastructure. Both equipment and security experts should be constantly monitored by an external legitimate body to ensure that an established security guideline is being followed in the daily running of the platform. A threat free exchange will give more confident to more people to adapt cryptocurrency.


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Tags: coincheck cryptocurrency

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