Coincheck Crypto Theft Possibly the Role of Russian Hackers Claims New Report

Previously, the heist that took away more than $530 million’s worth of cryptocurrency from the Japanese exchange Coincheck, was ascribed to North Korean hackers.

The Coincheck heist in the winter of 2018 may have been the work of Russian hackers, and not North Koreans, as previously thought. A recent investigation by Japanese newspaper Asahi Shinbun shows that one of the largest heists in crypto history may be based on a virus attack through Russian malicious software.

The hack originated from the personal computers of Coincheck employees. Later, evidence was found of Smoke Bot being active on the computers. The connection to Russian hackers was tenuous - the bots and malware were discussed on Russian forums as far back as 2011. But in 2018, reportedly the viruses could have contributed to the theft of private keys.

The Coincheck case raised the discussion of the responsibility of exchanges to secure digital assets. In the past, it has been human error that led to the loss of coins, especially after private keys were mishandled.

Storing private keys on an online machine, or even sending them unencrypted over Skype, have been bad practices noticed at some cryptocurrency companies. In 2019, Cryptopia lost not only all its Ethereum (ETH), but also lost access to all its wallets, after a hacker took away the only copy of the private keys. Later, QuadrigaCX reportedly lost access to its wallets, after the death of founder Gerald Cotten.

Exchanges remain one of the most vulnerable links in the cryptocurrency ecosystem. At the time of the hack, Coincheck was cash-rich after the 2017 bull run and compensated those that lost NEM at $0.80 per coin. Later, NEM (XEM) slid as low as $0.05, in effect making the compensation from Coincheck extremely generous.

In April 2019, Coincheck accepted the takeover offer of trading company Monex Group. Coincheck is coming back online slowly, relaunching with Bitcoin (BTC) trading against the Japanese yen. The market has daily volumes above $34 million in 24 hours and is in the process of security and transparency improvements.

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