Cryptocurrencies Slump as Japanese Exchange Halts Withdrawals, Trading

Cryptocurrencies Slump as Japanese Exchange Halts Withdrawals, Trading

The operator of a cryptocurrency exchange in Tokyo announced on Friday night that a hack has resulted in the loss of about 58 billion yen in the virtual currency NEM, reports NHK (Jan. 27).

As such, Coincheck's deposit restrictions have spread to cover all NEM sales and purchases, which also includes withdrawals.

The apparent heist is larger than the Mt. Gox hack in 2014 - in US dollar value - but its impact is unlikely to be as significant given the sheer number of cryptocurrencies in the market today and the increased value of bitcoin.

- One of Japan's largest exchanges, Coincheck, halted client withdrawals Friday, sending the cryptocurrency market spinning lower. The exchange has about 6 percent of yen-bitcoin trading, ranking fourth by market share on CryptoCompare.

Depositing NEM on Coincheck is now being restricted. It was the largest bitcoin exchange worldwide at the time.

Over the next hour, all cryptocurrency trading was restricted with the exception of bitcoin.

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Also, recap bonds would not impact the fiscal deficit target as IMF's rules classify such debt as "below-the-line" financing. This will enable banks to meet their capital requirements and provide for losses due to the sharp increase in bad loans.

Company officials were still looking into the cause and the ramifications of the virtual heist.

In Japan, one of the world's biggest markets for cryptocurrencies, policymakers have introduced a licensing system to increase oversight of local venues, seeking to avoid a repeat of the Mt. Gox exchange collapse that roiled cryptocurrency markets worldwide in 2014.

"Currently, buying and selling other than BTC (ortho coin) is temporarily suspended".

Finally, the hack of Nicehash, a bitcoin mining pool, in December 2017, was the most recent major theft of cryptocurrency before the Coincheck breach today. It operates exchanges between bitcoin/ethereum and fiat currencies in Japan.

It was also reported that Singapore based NEM Foundation was aiding in the tracking of the stolen funds but prospects were unclear if they would be able to recover any of the missing crypto. In a recent tweet, Coincheck said that the investigation into the hack is now ongoing. Coincheck had applied for a license and is under supervision by the FSA, according to Bloomberg. Coincheck later confirmed the losses and held a press conference to provide more details.

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