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Coincheck To Compensate the Damage For All the Clients Affected By Hack, Faced By Community Support

Japanese cryptocurrency exchange Coincheck has declared Saturday, Jan. 27, that it will compensate the damage for all of the 260,000 of its users who have become victims of the Friday NEM hack.

The Coincheck exchange has been hacked on Jan. 26, which led to a massive loss of 523 mln NEM coins, worth around $534 mln at that time. During a press release following the hack it has been showed by the exchange’s representatives that the funds were stored on a single-signature hot wallet, constituting a relatively low-leveled security system.

The company has acknowledged its intention to return the stolen money to the affected users. In accordance with the announcement, the refunds will be done using the exchange’s own capital.

Adding to that, the company is still considering the exact timing and methods for the process. But it has already declared that the compensation for each NEM coin will be JPY 88.549, which is the weighted average exchange rate during the period from when the trading was halted to the release of the latest announcement.

Coincheck noted that they are referencing the XEM/JPY exchange rate at Zaif, another Japanese exchange which has the largest trading volume for XEM globally.

Apart from this, Coincheck has again confirmed their intention to stay in business, as opposed to declaring bankruptcy, saying:

”Along with our ongoing efforts to file applications to be registered as a Cryptocurrency Exchange Service Provider with Financial Services Agency, we will continue business.”

Public reacts encouragingly

The steal of the NEM coins is the biggest hacking event in the history of cryptocurrency since the infamous Mt. Gox collapse, which also took place in Japan. The fact that the local community has already been “battle-tested” has likely contributed to it remaining largely unfazed by the latest event.

This is most obviously reflected through the numbers, as the Japanese cryptocurrency markets are on the rise today, less than 24 hours since the hack has taken place.

NEM also answered encouragingly on a global scale, with a nearly 30% leap on Coincheck’s announcement, in accordance with the Coinmarketcap.

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The necessity to support Coincheck, especially in light of their obligation to refund injured clients, has been a common wish among Japanese crypto community’s opinion leaders today, even as they confirmed the exchange’s part in not supplying enough security for its NEM wallet.

In the meantime, the development team behind NEM has declared that it is working on an automated system that will track the stolen coins and tag all addresses that receive the “tainted” money. This will allow any cryptocurrency exchange to blacklist the hackers’ accounts, preventing them from ever cashing out their illegally obtained fortune.