Coincheck: The World’s Biggest Cryptocurrency Theft

One of Asia’s biggest digital currency exchanges – Coincheck – has admitted the loss of around $534 million worth of cryptocurrency following an attack on its network.

The Shibuya, Tokyo, Japan-based company said hackers broke in at 02:57am local time on Friday (12:57pm EST on Thursday, 25 January). However, the breach went undetected for nearly another eight and half hours.

The incident is yet another reminder of the risk of leaving tokens inside an online exchange rather than a more secure option such as a personal wallet or hardware-based option.  In contrast, leading U.S. exchange Coinbase says on its website that 98 percent of its digital currency holdings are offline, or in “cold” storage.

Back to Basics: A quick guide to Cryptocurrency

A Cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.

The first cryptocurrency to capture the public imagination was Bitcoin, which was launched in 2009 by an individual or group known under the pseudonym Satoshi Nakamoto. As of September 2015, there were over 14.6 million bitcoins in circulation with a total market value of $3.4 billion.

Pending investigation, this episode could end up as the world’s largest cryptocurrency heist yet. It could eclipse the theft of $400 million from MtGox, another Tokyo-based exchange, which collapsed in 2014.

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