$550 Mln NEM Hack Close to Being Fully Laundered

The $550 worth of stolen NEM tokens form Coincheck are just about ready to be cashed out by the hackers who stole them

Wed, 28/03/2018 - 8:46

$550 Mln NEM Hack Close to Being Fully Laundered

Cover image via U.Today

After the NEM Foundation said that they would no longer be tracking the stolen coins from the biggest hack in crypto history, it has been reported that the hackers are close to cashing out their ill-gotten gains.

Analysis of online transactions of the stolen NEM by a Tokyo cybersecurity firm called Nikkei shows that nearly all of the funds have been laundered through dark web channels.

Sold out

The report suggests that a dark web portal selling the stolen funds was showing a balance of zero towards the end of last week. This portal was set up in early February with the purpose of turning the stolen NEM into other cryptocurrencies, and thus laundering it.

In about the middle of March, at least half of the 500 mln NEM appeared to have been swapped and laundered, but the pace sped up with the announcement from the NEM foundation that it would cease tracking the stolen coins.

The foundation said it had "provided law enforcement with actionable information," but did not explain why it had stopped the pursuit. Tokyo's Metropolitan Police Department set up an investigation team of about 100 in late February.

This hack also spurred the Japanese government to intervene and crack down harder on its regulations of cryptocurrency exchanges in the country.

Slowly turning it into cash

With the NEM now at least swapped for other digital currencies, such as Bitcoin, it would appear that the hackers are on their way to turning it into cash eventually. The report speculates that coins swapped for the stolen NEM have been spread out to a number of virtual wallets.

The thieves may seek to change the cryptocurrencies for cash, possibly through overseas exchanges that do not carry out stringent personal identification of account holders.

One for the bad guys

The decision to stop tracking the stolen coins, and the fact that it caused the thieves to ramp up their laundering really spells a win for the bad guys. The NEM has little to no chance of being recovered now, despite Coincheck beginning its path to refunding those affected.

About the author

Darryn Pollock

Darryn Pollock is an award winning journalist from Durban, South Africa. He picked up Vodacom’s Regional Sports Journalist Award in 2017 while expanding his Blockchain and cryptocurrency reach. He is a contributor to Forbes, Cointelegraph, Binary District, and of course, U.Today. Darryn’s belief is that Blockchain technology will be the driving force of the next technological wave and it is the obligation of journalists and writers to tell its emerging story with integrity and pride.