As large as the amount stolen, Coincheck is not Mt.Gox

The last time that the Japanese crypto exchange was broken into a record amount, a devastating blow was struck on the ecosystem. Apparently, in order to fully recover, the industry took two years.

At this time, the figures may be even scarier, but the crypto-currencies only shuddered and recovered in a day. So, the massive kidnapping of tokens with Coincheck only remotely resembles the infamous case of hacking Mt.Gox in 2014, while at the same time differing in a number of key factors that emphasize how far the industry has advanced.

Recall: Coincheck confirmed on Friday that the hacking, which is now believed to be probably the largest in the industry, occurred on the company’s servers at the beginning of the day for local Tokyo time. Shortly after the employees discovered the theft, the exchange suspended trading NEM, the stolen token, and then tens of other crypto-currencies previously available on the exchange.

Bloomberg reports that about 500 million XEM tokens valued at approximately $ 420 million were stolen from Coincheck. This is almost $ 80 million more than the time when hackers broke into Mt.Gox.

Although the news of the theft, at first broke the XEM rate by as much as 11%, CoinMarketCap data indicate that since the publication of the price has already begun to recover. Slightly depreciated and a number of major crypto-currencies, but only a couple of percent. But neither Coincheck nor XEM became so important for the whole industry as Mt.Gox and his bitcoins four years ago.

Other times

In the heyday of Mt.Gox was simply the only option for traders bitcoin, and altcoins were still somewhat novel. Today, there is a huge number of exchanges and a huge number of tokens.

Chris Berniske, the partner of Placeholder VC, estimated that the hacking of Mt.Gox amounted to about 5 percent of the total value in relation to all crypto-currency assets in the world.

Conversely, Coincheck’s losses amount to less than 0.25% of the total market value, which means that “the influence that Mt.Gox had at that time was incomparably stronger,” Berniske said. Moreover, although the crypto-currency paths are still very confusing, the stock exchanges, so to speak, have already learned to distinguish them from wide and direct “freeways”.

As Berniske said: “Crypto-investors and speculators have recently witnessed a number of hacking exchangers, and are likely to recognize that exchanges are a vulnerability in an application that is on top of the protocol, in contrast to vulnerabilities in crypto-currency protocols. The foundation, on which the crypto assets were once built, is not weakened yet, although we have become an example more about the need to further develop cryptographic algorithms. ”

Insurance payments

Another difference is that Coincheck customers expect that they will still be paid, while most of the bitcoins stolen from Mt.Gox, so no one has ever seen. During the Friday press conference, Coincheck executives said that customers will receive compensation for stolen assets, although it is not yet clear whether losses will be fully reimbursed.

Paul Rieger, a member of NEM Europe, who developed the XEM token, told CoinDesk that his organization was going to tag the stolen tokens and disclose stock exchanges that had been robbed. Since NEM is an account-based platform, all crypto-currency accounts can be marked in a special way, which allows the exchange to understand whether a particular address was robbed.

Rieger informed that third parties helped to mark the accounts by exchanging legal information with Coincheck. However, it is likely that not every tagged account has a stolen XEM token or that each stolen token has been flagged.

New Day Trading

The data of CoinMarketCap have repeatedly demonstrated that crypto-currencies, as a rule, collapsed after hacking. Nevertheless, the top twenty tokens of market capitalization began to recover within hours of the press release.

But many of the tokens are still in the drawdown, and we just have to find out which of the Crypto-currency with CoinMarketCap will recover faster than others. XEM tokens began to rise after reaching a minimum of 76.5 cents per token, which is still higher than the January low of 72.1 cents, fixed on the 17th.

After the press release, the tokens reached a mark of already 0.85 dollars, and after the suspension of the exchange trade at Coincheck, XEM even briefly broke the level in a whole dollar.


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