Coincheck Says It Lost Crypto Coins Valued at About $400M

https://www.bloomberg.com/news/articles/2018-01-26/cryptocurrencies-drop-after-japanese-exchange-halts-withdrawals

by Bitcoin_McPonzi • 8 years ago

76 46 8 years ago

bloomberg.com

ReverseCold• 8 years ago

Other discussion on the topic:

https://news.ycombinator.com/item?id=16240874

tannranger• 8 years ago

this is the future of money. amazing.

craftyguy• 8 years ago

No, this is pretty much the proverb "a fool and his money are soon parted" in action

mrb• 8 years ago

No, this just shows that future wallets and exchanges ought to be more secure. All the flaws that enable these crypto thefts are solvable on a practical level: multi-signatures, time-locked transactions, hardware wallets, offline wallets, etc (unsurprisingly, none of these technologies were used by Coincheck to protect their XEM tokens.)

dingo_bat• 8 years ago

"lost"

Spivak• 8 years ago

The addresses of the exchange are known and everyone can see the money that goes in and out. It would be quite difficult to actually steal the money.

dilap• 8 years ago

would it? what keeps them from just making up a new address and stealing the $? and then transferring that cash to some anon coin? (genuine question; not versed in this at all.)

InclinedPlane• 8 years ago

"Someone should really regulate this whole system, it's getting ridiculous."

__s• 8 years ago

People should really understand that trustless systems mean not trusting an exchange. If the coins aren't in your own wallet, you don't own them

An exchange is not a bank

otachack• 8 years ago

True, but it doesn't help that exchanges are pitching themselves as a bank.

ceejayoz2• 8 years ago

Of course, then you have to trust your own infosec. I don't, personally. Too many ways to fuck it up, and the bad guys only need to get it right once.

CryptoPunk3• 8 years ago

If people want the safety of regulated banks they have that option. If they want to risk their money with an unregulated exchange (though I think all Japanese exchanges are regulated) they should have that option.

Daishiman3• 8 years ago

If a million fools cause a systemic risk in the economy when their money gets lost or stolen, no, it turns out that there is a level of collective responsibility.

themagician2• 8 years ago

I feel like this is the ultimate fate of every exchange that holds coins.

JumpCrisscross• 8 years ago

this is the ultimate fate of every exchange that holds coins

I do too. There is a reason modern markets feature segregation between exchanges, clearing/settlement, and customer-facing (and funds-handling) brokers.

totalZero• 8 years ago

There are indeed some definite advantages to the structure of modern markets, as you say.

Securities markets, even structured as they are, would totally eat their customers if they were unregulated. It's fear of the SEC and FINRA ending their careers that keeps most of them in line. You could add three more participants to the crypto trading process and it would still be a minefield, because any one of those participants may misbehave absent regulations.

Modern markets involve a brokerage that acts as a custodian of your account holdings, separate from the exchange itself. However, that alone doesn't prevent churning, violation of account terms, opening of unauthorized accounts, recommendation of excessively risky trades, misuse of capital that leaves little liquidity to ballast the whole firm, etc.

Keep in mind that it's the FDIC that insures your personal bank deposits, and that there are regulatorily approved clearinghouses to remove counterparty risk from many derivatives markets. These things wouldn't exist without regulators.

_m8fo3• 8 years ago

I was curious if anyone has done the real life equivalent of this. According to thrillistthe great bank heist (from a single bank) in history was like 70M. [1]

Funny how an over a magnitude more money just goes missing.

[1]

https://www.thrillist.com/culture/most-successful-bank-robbe...

ikeboy3• 8 years ago

http://bgr.com/2015/02/16/300-million-bank-theft-hackers/

_m8fo3• 8 years ago

100 banks to get $300M - $900M is still a lot better than a single exchange losing half a billion.

dragonwriter• 8 years ago

Sure, but even a half-billion lost is amateur hour compared to the Coalition Provisional Authority in Iraq:

https://www.theguardian.com/world/2007/feb/08/usa.iraq1

politician2• 8 years ago

"custodial risk"

cryptozeus• 8 years ago

Is it may be just may be possible that these exchanges are stealing their own money ...you it not being regulated and all ??

danschumann• 8 years ago

My thoughts exactly.

Jedi72• 8 years ago

I wonder what the multiplier of real money to crypto money was. They say $400M was lost but if $10M of fiat was put in and the price goes 40x (because one guy who threw in $50 cashed out at the high price) was there really $400M lost, or just the original $10M?

jgalt212• 8 years ago

an interesting point you raise. I read recently that practically 100% of the principal for Madoff ponzi schema was recovered. 0% of the fictitious gains, mind you, but 100% of the original money invested.

Y7ZCQtNo392• 8 years ago

About 73% of the principal has been recovered as of December 2017. [1]

[1] https://www.bloomberg.com/news/articles/2017-12-18/madoff-vi...

tednash• 8 years ago

Are any exchanges actually built on robust decentralised infrastructure yet?

politician2• 8 years ago

This is why a technology like AirSwap [1,2] is the future of exchanges. You hold your own coins because the exchanges are just waiting to rob you.

[1] https://swap.tech/whitepaper/

[2] https://medium.com/@jon.doe.ethereum/airswap-a-centralized-e...

viach• 8 years ago

There is also a thing called AtomicSwap https://en.m.wikipedia.org/wiki/Atomic_swap

Coincheck Says It Lost Crypto Coins Valued at About $400M

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