- The record-breaking heist is the biggest in the history of the cryptocurrency industry.
- They were found to have bought stolen NEM tokens.
- There were more crypto hacking attacks in 2019 than any other year.
Two Japanese men, a doctor from Hokkaido and an Osaka-based company exec, have been arrested for buying NEM digital currency coins connected to the infamous Coincheck hack. The breach led to an unprecedented loss of about $530 million worth of cryptocurrencies.
The record-breaking heist is the biggest in the history of the cryptocurrency industry. Coincheck was soon after acquired by Monex, a U.K. foreign exchange agency. The Mt. Gox hack comes in second. About $470 million was stolen.
Coincheck Hack Investigations
The two men who bought the tainted NEM tokens have reportedly been exchanging them for other digital coins since February. Initial investigations into the hack led to a dead end, but a 2019 report by Asahi Shimbun revealed that Russian intrusion malware was used to break into the company’s servers.
It underlined that the Mokes and Netwire viruses, commonly used by Russian hackers, were used in the attack. The two types of malware can be spread via email. An infection allows cybercriminals to control the machine remotely.
A previous theory pointed to the North Korean Lazarus Group as the perpetrator. Lazarus is a state-funded hacker unit that is notorious for carrying out crypto exchange attacks. Experts shut down this hypothesis because the group never uses Russian code for infiltration purposes.
The stolen coins were initially sent to 19 cryptocurrency wallets. Crypto analytics companies, law enforcement agencies and enthusiasts have been tracking down the coins since 2018. The latest development may lead to clues on who the hackers are.
2019 Saw a Spike in Exchange Attacks
There were more crypto hacking attacks in 2019 than any other year. The amount of funds lost as a result was, even so, significantly lower than in 2018 when the CoinCheck attack occurred, and 2014 when Mt. Gox was targeted. In contrast, exchange hacks that occurred last year only led to a loss of about $283 million.
The sharp decline in successful attacks is an indicator of improved security across the board. According to a report by Chainalysis, major crypto exchanges are still being used by hackers to launder stolen funds. This typically occurs via their Over-the-Counter (OTC) trading desks. OTC platforms serve customers looking to buy or sell bumper quantities of cryptocurrencies without moving the markets. The following is an excerpt of the report outlining this.
“The problem, however, is that while most OTC brokers run a legitimate business, some of them specialize in providing money-laundering services to criminals. OTC brokers typically have much lower KYC requirements than the exchanges they operate on.”
Investigations by Chainalysis reveal that most major platforms still process funds tied to exchange heists, and this makes the task of apprehending the culprits much more complicated. According to the report, over 50 percent of stolen cryptocurrencies end up in Binance and Huobi.