Hackers may have converted half of the NEM cryptocurrency stolen from Tokyo-based bourse operator Coincheck Inc. into other virtual coins for laundering, a cybersecurity expert said Saturday.
The converted coins may have been exchanged to other virtual currencies or cashed by the hackers through the highly anonymous "dark web," making it even more difficult to track the stolen coins worth 58 billion yen ($547 million) at the time of the heist.
The hackers set up a website on the dark web for trading virtual coins and began converting the NEM coins on Feb. 7. Transactions are still being made on the website, suggesting more of the stolen NEM could be laundered and become impossible to trace, according to the expert.
The NEM Foundation, a Singapore-based organization promoting the virtual currency, has been tracking stolen NEM by marking accounts used for illicit transfers. The organization has called on virtual currency exchanges around the world not to process NEM payments from the marked accounts.
There have been cases where such marks were erased. Some exchange operators, alerted by an increase in NEM trading, have tried to block suspicious transactions, but those possessing NEM linked to marked accounts simply take the currency elsewhere, it said.
Japan Digital Design Inc. Chief Technology Officer Masanori Kusunoki, who is versed in cryptocurrency, said, "It has become evident we cannot block currency laundering just because all transactions are recorded."
"Exchange operators need to make prior agreements on the handling of stolen virtual coins," he added.
The hackers stole the NEM currency from Coincheck in late January in the largest digital currency heist in history, which eclipsed the 2014 theft of 48 billion yen in bitcoin from the now-defunct Mt. Gox.