The roughly 58 billion yen ($532 million) in cryptocurrency that was stolen from Tokyo-based virtual currency exchange Coincheck in a hacking attack last week was transferred to nine separate digital addresses, investigative sources said Tuesday.
The heist marked the largest ever loss of cryptocurrency to hackers and has sparked debate on how to regulate the decentralized technology.
According to investigators and the blockchain ledger, the bulk of the stolen NEM coins -- about 57.6 billion yen worth -- was sent to a single address over a 19 minute period from 12:02 a.m. Friday.
Then, in the 30 minutes from 2:57 a.m., the NEM coins were dispersed among eight separate addresses in an apparent attempt to make the stolen coins more difficult to trace. Coins were sent to a ninth address at 11:42 p.m., immediately after Coincheck began holding a press conference in Tokyo on the hacking attack.
Japan's financial watchdog on Tuesday began a broad review of virtual currency exchanges in the country, as lax security measures at Coincheck are believed to have played a part in the incident.
Finance Minister Taro Aso, who is also in charge of financial services, stressed the same day the need for stronger safeguards against such attacks, saying "virtual currency exchanges need to improve the way they manage their systems."
"It is greatly regrettable that a major breach like this happened. We need to strike the right balance between innovation and consumer protection," he said at a press conference.
Tokyo's Metropolitan Police Department has launched an investigation and plans to look at the communications log of Coincheck's server.
Many exchanges are still new and lack sufficient safeguards. The Financial Services Agency will question all exchanges on measures they have in place to protect customers' assets. It will conduct on-site inspections if it sees an issue.
Coincheck, which started in 2012, has been criticized for keeping its customers' NEM holdings in an online "hot" digital wallet rather than a much safer offline "cold" digital wallet.
The exchange said nearly all of those holdings went missing in the early hours of Friday, though it did not discover the theft until half a day later. The exchange has promised to compensate all 260,000 affected customers for around 46 billion yen in cash.
Virtual currency exchanges in Japan are required by law to register with the government. There are 16 registered exchanges and another 16 exchanges that are pending approval, the latter including Coincheck.
