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$500 Million Worth of Cryptocurrency Stolen From Japanese Exchange (cnbc.com)

Posted by BeauHD on from the gone-in-the-blink-of-an-eye dept.

Locke2005 shares a report from CNBC: Hackers stole several hundred million dollars' worth of a lesser-known cryptocurrency from a major Japanese exchange Friday. Coincheck said that around 523 million of the exchange's NEM coins were sent to another account around 3 a.m. local time (1 p.m. ET Thursday), according to a Google translate of a Japanese transcript of the Friday press conference from Logmi. The exchange has about 6 percent of yen-bitcoin trading, ranking fourth by market share on CryptoCompare. The stolen NEM coins were worth about 58 billion yen at the time of detection, or roughly $534.8 million, according to the exchange. Coincheck subsequently restricted withdrawals of all currencies, including yen, and trading of cryptocurrencies other than bitcoin. Locke2005 adds, "That, my friends, is the prime reason why speculating in cryptocurrency is a bad idea!"

57 of 104 comments (clear)

  1. Moron by sexconker · · Score: 3, Informative

    Anyone who leaves any balance of coins or fiat currency in an online exchange is a moron.

    If you want to speculate, mine / buy your coins, store them in you OWN wallet, then move them to the exchange when you want to sell them.

    1. Re:Moron by MikeDataLink · · Score: 3, Interesting

      Anyone who leaves any balance of coins or fiat currency in an online exchange is a moron.

      If you want to speculate, mine / buy your coins, store them in you OWN wallet, then move them to the exchange when you want to sell them.

      I mostly agree with this sentiment. You shouldn't store anything online until you're ready to use, but what if I moved a pile of $100K worth of coins 5 minutes before the hack? These sites should still be responsible for losses.

      --
      Mike @ The Geek Pub. Let's Make Stuff!
    2. Re:Moron by war4peace · · Score: 1

      Use smaller amounts and multiple exchanges.

      --
      ...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
    3. Re:Moron by msauve · · Score: 1

      Yeah, that's just it. "Locke2005 adds, "That, my friends, is the prime reason why speculating in cryptocurrency is a bad idea!"?" No. Speculation is bad because it entails high risk, whether tulip bulbs, subprime mortgages, or crypto currencies. The prime reason for trouble with crypto (if you're willing to take the risk) is letting someone else hold your wallet.

      Traditional equities (stock markets/bonds) have well established and proven methods of maintaining accounts with reasonable security. These new fangled things, not so much, which only adds to the risk.

      --
      "National Security is the chief cause of national insecurity." - Celine's First Law
    4. Re:Moron by Solandri · · Score: 3, Insightful

      The banks have figured out how to make it (relatively) safe. If a cryptocurrency exchange hasn't figured it out, the fault is theirs.

      The point of putting your money (or crypto coins) in a bank or exchange service is because it's become too valuable to keep on hand. Your advice to keep it in your own wallet makes sense if you have a couple hundred bucks in coins. But if you've got (say) $100,000 in coins, you'd be an idiot to keep it in your own wallet where a fire or burglar or forgetting your password could potentially cause you to lose the coins. We put valuables (money, coins, jewelry, important papers, etc) in a bank because they've paid millions of dollars to put together secure storage, and will lease space in it to you for a nominal fee.

      The problem happens when you store your coins in an online exchange, under the assumption that because they're big and online they must have spent millions of dollars to put together secure storage.

    5. Re:Moron by quantaman · · Score: 5, Insightful

      Anyone who leaves any balance of coins or fiat currency in an online exchange is a moron.

      If you want to speculate, mine / buy your coins, store them in you OWN wallet, then move them to the exchange when you want to sell them.

      Store where?

      On your computer? Just wait for a keylogger virus to clean you out.

      Offline on a spare HD? Hope the HD doesn't die, oh, and be careful a keylogger virus isn't running when you plug it back in.

      Redundant duel backups in separate safety deposit boxes and a special offline machine with which to do set up the transfer? Sounds like a lot of work.

      Oh, and make sure you can remember your password in 5 years.

      --
      I stole this Sig
    6. Re:Moron by shubus · · Score: 1

      Common sense is not so common. Lazy people are paying the price.

    7. Re:Moron by MrL0G1C · · Score: 1

      And what's stopping you from putting the majority of your crypto-coin into a wallet and then you know, ENCRYPTING that wallet with a good password. Then you can back it up everywhere and anywhere because it's encrypted. I back up my passwords to my email accounts because they're safely encrypted.

      --
      Waterfox - a Firefox fork with legacy extension support, security updates and better privacy by default.
    8. Re:Moron by Anonymous Coward · · Score: 1

      If you do any sort of frequent trading, you need to keep it on the exchange though. Many exchanges charge withdrawal fees, which are sometimes quite significant. There can also be delays of several minutes or even hours when trying to transfer back and forth to an exchange, causing you to miss an opportunity. I don't disagree that you should keep them in your own wallet if you are just holding them though.

    9. Re:Moron by sexconker · · Score: 1

      On your computer, in the cloud, etc. Just encrypt it and don't be a retard.

    10. Re:Moron by Hognoxious · · Score: 1

      Redundant duel backups

      You mean one with swords and the other with pistols?

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    11. Re:Moron by smallfries · · Score: 1

      No, he clearly means seconds who can step in if the gentlemen is indisposed.

      --
      Slashdot: where don knuth is an idiot because he cant grasp the awesome power of php
    12. Re:Moron by gnasher719 · · Score: 1

      Crypto currencies are a zero sum game in the best case. There is many paid in by investors / speculators / morons and there is money paid out to current owners of the currencies. These amounts are the same. So on average an investor / speculator / moron isn't going to make money.

      But it's not even a zero sum game, because there is cost involved for mining, for the work involved, cost of infrastructure and so on. And on top of that, there are criminals that from time to time get considerable amounts of currencies into their own pockets.

    13. Re: Moron by war4peace · · Score: 1

      Wrong comparison.
      If I want to buy a TV (or car, or house, etc) using Bitcoin, I can do that right now, from my own personal wallet, without moving it through any exchange and with exactly ZERO risk (except for my PC being infected of course). Exactly the same as fiat currency. There are three major online stores accepting Bitcoin here in my country.

      But in order to get involved in financial speculation (trading, etc), just like with fiat currency, you need to move it to an exchange.

      --
      ...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
    14. Re:Moron by Hognoxious · · Score: 1

      You use words like "fisticuffs" and "ragamuffins", don't you?

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    15. Re:Moron by smallfries · · Score: 1

      Fisticuffd you say? Probably means you are pushing in a little too deep for your partner’s pleasure. If in doubt remove your cufflinks you raggamuffin.

      --
      Slashdot: where don knuth is an idiot because he cant grasp the awesome power of php
  2. what? bad idea? by spatley · · Score: 4, Insightful

    "That, my friends, is the prime reason why speculating in cryptocurrency is a bad idea!"

    It seems that if this stuff is worth stealing, it has value. Wouldn't that make it a good candidate for speculative investment? Now allowing some half-assed third party to hold my investment in a way that could allow hackers to gain control of my funds, now that sounds like a bad idea.

  3. If imaginary money is stolen is it still theft? by JoeyRox · · Score: 5, Funny

    If so I'd like to report $15,140 stolen from a Monopoly game I own that's gone missing.

    1. Re:If imaginary money is stolen is it still theft? by kiviQr · · Score: 1

      y, I am missing a couple hotels on the Boardwalk!!!

    2. Re:If imaginary money is stolen is it still theft? by NettiWelho · · Score: 1

      If so I'd like to report $15,140 stolen from a Monopoly game I own that's gone missing.

      So, according to the exchange rate on amazon you suffered losses of about 20 USD?

    3. Re:If imaginary money is stolen is it still theft? by JoeyRox · · Score: 5, Insightful

      Fiat currency is backed by the full faith and credit of the US Government, which includes but is not limited to it's power to levy taxes on the income and productive capacity of the economy to recover the wealth lost in that currency.

      Now tell me, who and what backs cryptocurrency?

    4. Re:If imaginary money is stolen is it still theft? by NettiWelho · · Score: 1

      y, I am missing a couple hotels on the Boardwalk!!!

      Psst! Dude, want a really good deal on monopoly hotels? Theres a sale on ebay for 12 000 hotels for 960$ or best offer!!

    5. Re:If imaginary money is stolen is it still theft? by Anonymous Coward · · Score: 1

      If so I'd like to report $15,140 stolen from a Monopoly game I own that's gone missing.

      This post written from a laptop purchase with "imaginary" money generated by a computer purchased with more "imaginary" money that came from gaming rig bought for gaming but mining in it's off time.

      I know it's supposed to be cute but it's really just more ignorant FUD by people too stubborn or stupid to understand how to work what's happening now and for the past couple of years. I'm sorry you're missing the down pour of "imaginary" money but enjoy your "imaginary" stocks or whatever you do to invest. Those NEVER collapse into nothing.

    6. Re:If imaginary money is stolen is it still theft? by Fly+Swatter · · Score: 1

      Sorry to burst peoples' bubbles, but monopoly money is more real than this cryptology (-- why is chrome flagging this as misspelled?) based blockchain currency numbers game.

    7. Re:If imaginary money is stolen is it still theft? by iggymanz · · Score: 1

      I found those and a black sock in my dryer with my laundry, are they yours?

    8. Re:If imaginary money is stolen is it still theft? by gravewax · · Score: 5, Insightful

      No more imaginary than the fiat currency you currently rely on. None of it backed by anything other than faith, and most of it is just a bunch of 1's and 0's in your bank or broker's computer system.

      that is completely false, like it or not fiat currencies are backed by the corresponding government and operate under financial laws of the relevant country.

    9. Re:If imaginary money is stolen is it still theft? by Anonymous Coward · · Score: 1

      It's less "who backs it" and more "who has the power to destroy it at will". When you lost the ability to convert dollars into gold suddenly and irrevocably, that was the "full faith and credit of the US government". The US Government can also print literally quintillions of dollars instantly, if they so choose. Most importantly, they have routinely found ways to control dollars that are not properly under their control with endless embargoes and freezes and threats. Bitcoin is secured entirely by the belief, partially justified, that any given government can not create, destroy, render worthless, or impede it. This property alone gives it some inherent value- though likely far less than we have seen it rendered for during this bubble.

    10. Re:If imaginary money is stolen is it still theft? by george14215 · · Score: 1

      When has this awesome government backing ever stopped hyperinflation? Resulting in the fiat currency becoming worth 0?

    11. Re:If imaginary money is stolen is it still theft? by Anonymous Coward · · Score: 1

      More often than anything's prevented cryptocurrency from crashing hard.

    12. Re:If imaginary money is stolen is it still theft? by angel'o'sphere · · Score: 1

      You are somehow not grasping what the word "backed" means.
      Fiat currencies are backed by nothing, hence the name "fiat".

      --
      Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
    13. Re:If imaginary money is stolen is it still theft? by angel'o'sphere · · Score: 1

      fiat currencies are backed by the corresponding government
      No, they are not. Fiat currencies are backed by nothing, hence the name: "fiat".

      operate under financial laws of the relevant country
      Correct. But that is no "backing".

      --
      Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
    14. Re:If imaginary money is stolen is it still theft? by Anonymous Coward · · Score: 1

      fiat means by decree or formal authorisation retard, hence backed by the government.

    15. Re:If imaginary money is stolen is it still theft? by Hognoxious · · Score: 1

      They're backed by the fact that you can pay your taxes with them, and so avoid an extended stay in uncomfortable accommodation.

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    16. Re:If imaginary money is stolen is it still theft? by smallfries · · Score: 1

      "Fiat" means authority. Which is what fiat currencies are backed by: an authority derived from force.

      --
      Slashdot: where don knuth is an idiot because he cant grasp the awesome power of php
    17. Re:If imaginary money is stolen is it still theft? by JoeyRox · · Score: 1

      I'm grasping fine - you're putting misplaced confidence in the term "backed", as if it's some type of self-enacting guarantee. Let's say the US Government still said the USD was backed by gold. Then a currency crisis of confidence happened and everyone rushes to exchange their dollars for gold, after which the Government changes their mind and says "sorry, we're no longer going to allow you to exchange your dollars for gold". Now what? You see, "backing" is just a promise, the same as how fiat is just a promise.

    18. Re:If imaginary money is stolen is it still theft? by angel'o'sphere · · Score: 1

      The moment the government changed the rules, the dollar was no longer backed ...
      Fiat money does not make any promises.

      --
      Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
    19. Re:If imaginary money is stolen is it still theft? by angel'o'sphere · · Score: 1

      That does not make them 'backed' ... get it: fiat money is not backed.
      http://www.dictionary.com/brow...

      --
      Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
    20. Re:If imaginary money is stolen is it still theft? by angel'o'sphere · · Score: 1

      The word 'backed' does not mean 'you can pay taxes with it'.

      --
      Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
    21. Re:If imaginary money is stolen is it still theft? by smallfries · · Score: 1

      Sure they are. Try printing your own dollars and then tell me that the currency is not backed by force.

      --
      Slashdot: where don knuth is an idiot because he cant grasp the awesome power of php
    22. Re:If imaginary money is stolen is it still theft? by angel'o'sphere · · Score: 1

      When do you finally get it?
      The are enforced by law..

      There is no force in it nor any backing.

      If currencies would be 'backed' by 'force', I could exchage money for 'force' at the central bank.
      However I can't exchange them for anything, because they are not backed by anything.

      If I would print my own currency I would be free to back it by anything I wanted ... if I and the users would accept the osts of backing e.g.

      --
      Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
    23. Re:If imaginary money is stolen is it still theft? by smallfries · · Score: 1

      So what is the law backed by?

      --
      Slashdot: where don knuth is an idiot because he cant grasp the awesome power of php
    24. Re:If imaginary money is stolen is it still theft? by angel'o'sphere · · Score: 1

      Depends on the ccountry.
      In mine by courts.
      In Somalia or South Sudan by guns.

      Why that stupid question?

      Obviously the word 'backed' has different meanings in different contexts like 'law' and 'money'.

      Most certainly law is not 'backed' by a secure storage of a commodity, like a 'backed currency' would be.

      --
      Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
    25. Re:If imaginary money is stolen is it still theft? by smallfries · · Score: 1

      You should learn more.

      https://www.quora.com/What-doe...

      --
      Slashdot: where don knuth is an idiot because he cant grasp the awesome power of php
    26. Re:If imaginary money is stolen is it still theft? by angel'o'sphere · · Score: 1

      Unlike you, I read lots of books about the topic :)

      --
      Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
  4. Expect fun malware in the future! by Gravis+Zero · · Score: 1

    While malware scammers are focused on extorting people for cash by using cryptocurrencies (aka ransomware), I foresee the next iteration, a totally pervasive malware network that does only one thing: identify and steal cryptocurrency. Current malware has the problem of being easy to identify infected machine behavior but when the only thing you are doing is looking then you can spread far and wide like stuxnet, doing nothing but looking for something. Then when you they find your wallet, they just send a copy home and transfer the funds. No files altered, no suspicious behavior, just poof! your virtual money is gone.

    This is the future of malware.

    --
    Anons need not reply. Questions end with a question mark.
    1. Re:Expect fun malware in the future! by supremebob · · Score: 1

      There is a new cryptocurrency called Nimiq coming out soon that’s designed to be mined with a Web browser using Javascript. It’s designed to be GPU and ASIC “resistant”, meaning that most people will be mining in with ordinary desktop CPU’s at least initially.

      I can only imagine the various types of malware that are going to show up for mining that cryptocurrency.

    2. Re:Expect fun malware in the future! by angel'o'sphere · · Score: 1

      You can not write an algorithm that is GPU or ASIC "resistant", what ever that is supposed to mean in your nomenclatur.

      An ASIC is just an algorithm "burned into hardware" instead of a flow of instructions for a normal CPU. You can put everything into an ASIC.

      --
      Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
    3. Re:Expect fun malware in the future! by Biogoly · · Score: 1

      Not exactly true. While you can "put everything into an ASIC", it not the case that it may be cost effective to do so. ASICs are good at doing one thing REALLY fast. So, for example, an ASIC processing the Bitcoin SHA256 hash is much faster than any general purpose processor. However, the SHA256 hash is not memory intensive...all you need is the ASIC. There is currently a variety of cryptocurrency algorithms that are truly ASIC resistant in that they are very memory intensive: Cryptonight, Equihash, LyraRev2a, etc... While it might be "possible" to build an ASIC miner for these algorithms, it's performance against a GPU would be marginal at best and wouldn't justify the cost...that and the GPU can be used for everything and the ASIC is obviously only good for the algo it's programmed for.

  5. Well... by benjfowler · · Score: 1

    They don't call 'em Dunning-Kruegerrands for nothing.

  6. Re:Use your wallet by supremebob · · Score: 1

    It kinda hard to convince people that cryptocurrency is a “real” currency when even it’s fans compare their exchange sites to a casino. Just saying.

  7. Japan - same country that gave us Mt Gox... by saccade.com · · Score: 1

    This is the same country that gave us the previous major crypto-currency fiasco. Mt Gox lost 650,000 BTC - roughly $7.2B (as in billion) at today's prices. https://en.wikipedia.org/wiki/...

  8. Re:Use your wallet by nedlohs · · Score: 1

    Foreign exchange trading is also just like a casino, so I'm not sure why that matters

  9. It aint no fiat currency. by 140Mandak262Jamuna · · Score: 1
    It is the future currency validated by millions of independent miners.

    In no time, those millions will spring into action, find the perp who stole the money and restore the status quo ante.

    You fiat currency believers need to file a case and wait for some government agency to investigate find the perp, and try to recover the stolen goods.

    Er, what...? There is no real peaceful conflict resolution mechanism? Its finders keepers losers weepers rule from third grade! What! You gotta be kidding....

    --
    sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
  10. A very profitable business to be in it seems by Anonymous Coward · · Score: 1

    Open a coin exchange
    Make it easy to save your wallet ...and awkward to remove it
    Wait till a few million/billion is deposited
    Claim Hackers Stole My Homework (TM)
    Profit!

  11. Exchanges by Waccoon · · Score: 1

    You know what I love most about cryptocurrency? It's decentralized!

  12. Re:BEST money is backed by the GUN by Hognoxious · · Score: 2

    Oil sales are denominated in dollars. That doesn't mean dollars are backed by oil.

    By that logic the Irish Punt was backed by Guinness.

    --
    Confucius say, "Find worm in apple - bad. Find half a worm - worse."
  13. Trading in Stolen Goods by Luthair · · Score: 1

    Something I'm surprised hasn't come up yet with these constant thefts - the exchange knows which coins were stolen, it is illegal to knowingly trade in stolen goods so these subchains ought to be blacklisted from trading in most countries.