NEM Foundation: Stolen Coincheck Funds Not Sent to Exchanges

The 58 billion yen worth of XEM tokens are on the move, according to the NEM Foundation, but no attempt to sell them on exchanges has been made.

AccessTimeIconJan 31, 2018 at 11:00 p.m. UTC
Updated Sep 13, 2021 at 7:30 a.m. UTC

The 58 billion yen worth of XEM tokens are on the move, according to the NEM Foundation, but no attempt to sell them on exchanges has been made as of Wednesday.

Some 500 million XEM were stolen from Japanese cryptocurrency exchange Coincheck last week in what some observers have called the largest exchange hack to date. However, despite reports to the contrary, those behind the attack have not yet tried to sell them, according to a statement released by the Foundation Wednesday morning.

"None of the stolen funds have been sent to any exchanges. As long as those funds are off public exchanges they will be very difficult to liquidate, especially in large amounts," the group stated.

Reuters had previously reported that NEM Foundation vice-president Jeff McDonald had said the hacker or hackers had started trying to move the stolen tokens to six different exchanges in order to sell them.

However, this information was not entirely accurate, NEM Europe promoter Paul Rieger asserted. In an email to CoinDesk, the NEM Foundation subsidiary member said:

"There were eleven 100 XEM transactions from one of the hacker accounts to “random” accounts. Nothing was sold. There were also no attempted transactions to exchanges."

Rieger had previously told CoinDesk that his group was tagging accounts containing stolen XEM. His team also helped develop a system to automatically flag any stolen XEM, as well as the accounts they appeared on.

On Wednesday, The Japan News reported that the stolen XEM was transferred to 20 different accounts over the course of five days, with a series of transfers on both Jan. 26 (Friday) and Jan. 30 (Tuesday). The newspaper further stated that the Metropolitan Police Department was investigating these transfers as a possible attempt at slowing the investigation into the actual hack.

The Japan News further claimed that nine different accounts each received at least 11,000 yen.

It is unclear where The Japan news received its information from. The NEM Foundation declined to confirm the report's claims.

In its statement, the NEM Foundation noted that it would be difficult for the hacker to liquidate most of the stolen XEM, and the token's developers were continuing to monitor the accounts regardless.

Though news of the theft did not have a major impact on XEM's price, news that Coincheck would reimburse its investors for their stolen funds sent the coin's price to a local high of $1.22. However, it has since begun dropping again, falling to about $0.76 as of press time amidst a wider crypto bear market.

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