Coincheck Will Refund Some, Not All, Of $520M Lost In Hack

Coincheck, one of Japan’s largest cryptocurrency exchanges, will reimburse customers up to ¥46.3 billion ($426 million) due to a hack it suffered last week.

According to The Wall Street Journal, Coincheck lost cryptocurrency worth around $530 million as a result of the hack. It could be the largest heist in the nine-year history of digital currencies.

On January 26, Coincheck revealed that 500 million NEM tokens were sent “illicitly” out of the exchange. As a result, the exchange stopped withdrawals, non-bitcoin trades and deposits into NEM coins.

“We realize that this illicit transfer of funds from our platform and the resulting suspension in services has caused immense distress to our customers, other exchanges, and people throughout the cryptocurrency industry, and we would like to offer our deepest and humblest apologies to all of those involved,” the company wrote on its website. “In moving towards reopening our services, we are putting all of our efforts towards discovering the cause of the illicit transfer and overhauling and strengthening our security measures while simultaneously continuing in our efforts to register with the Financial Services Agency as a Virtual Currency Exchange Service Provider.”

The approximately 260,000 affected customers will be paid back in Japanese yen at a rate of 88.549 yen per NEM. There was no word on when the customers could expect to receive their payments, but the funds will be repaid via Coincheck Wallet.

Coincheck explained in the blog post that it calculated the repayment rate based on “the prices during the period beginning with the suspension of new purchases and sales of NEM on the Coincheck platform and ending with the release of this notice.”

But some on Twitter were unimpressed with the rate, believing that the company should pay back customers at the earlier, higher rate, or reimburse them in NEM instead of yen.

In the meantime, Coincheck explained that it still has plans to get a license from Japanese authorities to operate as a cryptocurrency exchange.  The country now requires bitcoin exchanges to be licensed. Some exchanges — like Coincheck — were allowed to stay in operation as long as they applied for a license.