By Jemima Kelly and Tommy Wilkes
LONDON (Reuters) - Hackers who stole around $530 million worth of cryptocurrency from the Coincheck exchange last week -- one of the biggest such heists ever -- are trying to move the stolen "XEM" coins, the foundation behind the digital currency said on Tuesday.
NEM Foundation, creators of the XEM cryptocurrency, have traced the stolen coins to an unidentified account, and the account owner had begun trying to move the coins onto six exchanges where they could then be sold, Jeff McDonald said.
Hackers made off with roughly 58 billion Japanese yen ($533 million) worth of the cryptocurrency from Tokyo-based exchange Coincheck Inc late last week, raising fresh questions about security and regulatory protection in the booming market.
The location of the hackers' account was not known.
"[The hackers are] trying to spend them on multiple exchanges. We are contacting those exchanges," Singapore-based McDonald told Reuters.
NEM Foundation spokeswoman Alexandra Tinsman said the hacker had started sending out "XEM" coins to random accounts in 100 XEM batches, worth about $83 each.
"When people look to launder these types of funds, they sometimes spread it into smaller transactions because it's less likely to trigger (exchanges') anti-money laundering (mechanisms)," said Tom Robinson, co-founder of Elliptic, a cryptocurrency security firm in London.
Robinson said such hopping among different cryptocurrencies was becoming more prevalent among cybercriminals trying to cover their tracks.
The coins that the hackers had taken made up around 5 percent of the total supply of XEM, the world's 10th biggest cryptocurrency, according to trade website Coinmarketcap.
McDonald said the hackers were unlikely to try to spend anything close to all of the stolen cryptocurrency at once, because the "market simply couldn't absorb that much".
If the hackers successfully moved the coins to an exchange, they were likely to try to swap them into another cryptocurrency before transferring the coins back into a conventional currency, he said. That would make the funds difficult or near impossible to trace.
"I would assume that they are going to get away with some of the money," McDonald said.
CRYPTO-HOPPING
At least three dozen heists on cryptocurrency exchanges since 2011 are known; many of the hacked exchanges later shut down. More than 980,000 bitcoins have been stolen, and few have ever been recovered.
In 2014, Tokyo-based Mt. Gox, which once handled 80 percent of the world's bitcoin trades, filed for bankruptcy after losing bitcoins worth around half a billion dollars -- then the biggest ever such heist, which triggered a huge sell-off in bitcoin.
"It shows how far the industry has come that a hack of this scale isn't really an issue," said Robinson at Elliptic. "This is just kind of a blip."
As of 1744 GMT, XEM was trading at around $0.83 per coin, with a total market value of around $7.5 billion. That was around 20 percent lower than trading levels on Friday, when the hack was announced, but XEM is still up almost 300 percent over the past two months.
Japan's Financial Services Agency (FSA) on Monday ordered improvements to operations at Coincheck, which on Friday suspended trading in all cryptocurrencies except bitcoin.
(Reporting by Tommy Wilkes; Editing by Sujata Rao, Catherine Evans, Larry King)
Disclaimer: No Business Standard Journalist was involved in creation of this content
