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Three years ago, Coincheck was stolen worth 58 billion yen in NEM tokens. The 31 people arrested this time involved 18.8 billion yen, which accounted for 30% of Coincheck’s theft.
Original title: “[ChainDeEx Exclusive] 3 years ago, the “largest coin theft case in history” finally came to an end, and Japan arrested 31 people”
Written by: Mori Goro
The Japanese police recently stated that as of January 22, 31 people had been arrested for illegal transactions in NEM currency worth 18.8 billion yen in accordance with the Organized Crime Punishment Act. The amount involved in this case accounted for 30% of Coincheck’s theft.
In January 2018, the cryptocurrency exchange Coincheck was exploded and lost about 58 billion yen (calculated based on the value at the time) of virtual currency NEM.
The Tokyo Metropolitan Police Department stated that the 31 persons arrested and sent for inspection were Japanese men in their 20s and 40s living in 13 prefectures in Japan including Hokkaido and Tokyo. The total transaction amount of 31 people is 18.8 billion yen, and the maximum transaction amount is about 6.7 billion yen. The police said that the remaining digital currency has been leaked overseas and the holder cannot be identified.
It all starts with a phishing email
The Japanese police disclosed the process of committing the crime at the time. It is reported that on December 6, 2017, a person claiming to be a related person of an overseas university sent a phishing email to an employee of Coincheck. After repeated exchanges, the person said that “I want to publish your (the employee) in an academic journal. )” and issued instructions to the employee, stating that “video conference is required.” The employee downloaded the file sent by the hacker without any protection. The file was opened on January 12, 2018, and the company’s system was infected as a result.
Since then, at 0:02 am on January 26, the exchange’s digital currency began to leak continuously. Someone illegally accessed Coincheck’s system and stole the secret key. By about 8:30 in the morning, the hacker had successfully transferred 58 billion yen worth of digital currency to an external account in 11 batches, and then transferred it to multiple separate accounts twice.
From February to March, the suspect established a trading site on the dark web connected to the anonymous website Tor, and started trading at a price that was 15% cheaper than the market price (58 billion yen) at the time.
The police analyzed the communication log files and showed that before the digital currency was leaked, the computer had suspicious communication records with servers located in Europe and the United States, but then passed through servers in multiple countries/regions. Although the Japanese police requested each country to do Investigation and cooperation, but did not obtain more favorable information.
In addition, the arrest and inspection of suspects in Japan actually started in February 2018. The six suspects were arrested in March of that year.
Difficulty in tracking remaining currencies
Although the Japanese police failed to locate the planner, a report released by the United Nations on the 19th of this month pointed out that from January 2017 to September 2018, a group of hackers located in North Korea had successfully conducted operations in Asia including Coincheck. Cryptocurrency exchanges have launched more than five cyber attacks. Therefore, the police inferred that North Korean hackers also participated in the attack in the Coincheck theft case. But the hacking technique is too high to be locked.
In addition, although the Japanese Financial Services Agency implemented the registration system in 2017, the Coincheck exchange had not yet obtained a trading license at that time. After the largest cryptocurrency theft case in the history of the digital currency industry occurred, on February 3, the Financial Services Agency of Japan announced the inspection of 32 domestic cryptocurrency exchanges, including 16 companies that have obtained trading licenses and “equal Exchange”.
At the same time, the Financial Services Agency requires Coincheck to submit accident reports and preventive measures before February 13th, and requires all other cryptocurrency exchanges in Japan to conduct internal inspections based on the 43-item checklist of the “New Funds Decision”. All platform submissions include preventive measures. Risk management system reports including details of cyber attacks.
However, the real-name system has not been taken seriously before, and the transaction of digital currency in many other countries in the world is still a black industrial chain, and the real-name system is more difficult to advance. Therefore, it is almost impossible to lock suspects in this incident.
The Anti-Money Laundering Financial Action Task Force (FATF) has recommended the introduction of a “Travel Rule” in 2019, where each exchange operator shares information about the sender and receiver of digital currency. But from the perspective of implementation, only Singapore and South Korea, which have included digital currency transactions under legal supervision, have introduced this rule.
After 3 years, this stolen currency incident has gradually been forgotten, but its historical status cannot be denied.
Digital currencies, including Bitcoin, have experienced great ups and downs in the past three years. This incident is also one of the events in which the credibility of digital currencies has fallen to the bottom, rewriting Japan’s fate as a major digital currency trading country.
Subsequently, digital currencies began to be valued. At present, CBDC projects in various countries are also being continuously promoted, and governments of various countries have also begun to study the issuance and transaction systems of central bank digital currencies based on their own national conditions. More importantly, after the stolen currency incident, governments and financial professionals in various countries began to face up to digital currencies. Bitcoin and others began to get rid of the stigma used for “money laundering”, “terrorist funds”, and dark web transactions. Towards the public investment perspective.
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