Japanese arrests over stolen NEM from Coincheck hack

The Metropolitan Police Department (MPD) arrested two men on March 11 on suspicion of illegally exchanging the cryptocurrency NEM (ticker: XEM) into another virtual currency. The Nikkei newspaper reported that the men are believed to have received approximately 24 million XEM over the dark web from February to March 2018 while knowing that the person supplying the NEM had stolen it from Coincheck, Japan’s largest cryptocurrency exchange.

On January 26, 2018, Coincheck had an illegal outflow of NEM cryptocurrency, then worth approximately 58 billion (approximately $540 million). The two men arrested allegedly received about 5% of the total amount of stolen NEM from the person who stole it. Converted at the exchange rate at the time of the outflow incident on January 26, 2018, the roughly 24 million XEM was worth $21.6 million. The two suspects are accused of converting the received NEM cryptocurrency into other virtual currencies such as Bitcoin.

The MPD has yet to identify the person behind the NEM transactions, but police believe others have also been involved in exchanging the stolen NEM and will continue their investigation. Nearly all the NEM stolen from Coincheck is believed to have been exchanged for other cryptocurrencies, so the whereabouts of the other roughly 95% of the stolen NEM remains unknown.