UPDATE (27, January 20:47 UTC): Coincheck has detailed its compensation policy for customers whose XEM was stolen. It will repay them 88.549 Japanese yen (about $0.81 U.S.) per stolen coin, out of its own funds, according to a Google translation of the exchange's press release. With 523 million XEM taken, according to the latest estimate. that would bring the total company payout to more than $420 million. The timing of the repayment is still "under consideration."
The last time a Japanese cryptocurrency exchange was hacked for a record haul, it was a devastating blow to the ecosystem. Arguably, it took two years for it to fully recover.
To recap: Coincheck confirmed Friday that the hack, now likely the largest ever in the space, occurred on its servers early afternoon local time in Tokyo. Shortly after it discovered the theft, the exchange suspended trading of NEM, the stolen crypto in question, then of the other dozen coins it lists.
While the initial news sent XEM prices down as much as 11 percent, data from CoinMarketCap indicates the price began to recover as of press time. Most of the other major cryptocurrencies slid, but only slightly, with declines in the single digits.
But then, neither Coincheck nor XEM are as systemically important as Gox and bitcoin were four years ago.
In its heyday, Mt. Gox was just about the only game in town for bitcoin traders and altcoins were still something of a novelty. Today, there are many more exchanges, and many more cryptocurrencies.
Chris Burniske, a partner at Placeholder VC, calculated that the Mt. Gox hack represented roughly 5 percent of all crypto assets’ aggregate network value at the time.
In contrast, the Coincheck theft represents less than 0.25 percent of the aggregate value, meaning "the impact of the Mt. Gox hack was more than an order of magnitude greater on the crypto markets at the time," he said.
What's more, while the onramps for cryptocurrencies remain rickety, the markets have learned to differentiate them from the superhighways they connect to.
As Burniske put it:
Recovery of funds?
Separately, Paul Rieger, a member of the NEM Europe team, told CoinDesk that his organization was tagging the stolen XEM and sharing the affected addresses with exchanges.
Because NEM is an account-based platform, all associated accounts could be tagged, thereby letting exchanges know whether an account had stolen funds or not.
Rieger said third parties helped with tagging the accounts by sharing information about legitimate Coincheck withdrawals. However, it is not absolutely certain that every account tagged contained stolen XEM, or that every stolen token has been tagged.
Just another trading day
Data from CoinMarketCap showed that while cryptocurrencies generally took a tumble after the hack was revealed, each of the top 20 coins and tokens by market cap began to recover over the last few hours as of press time.
Many of these tokens are still down on the day, however, and it remains to be seen whether most of the coins listed on CoinMarketCap will move into the green.
They had climbed to about $0.85 cents as of press time, after spiking to over a dollar just after the exchange suspended trading.
This article has been updated for clarity.
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