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Coincheck Says It Lost Crypto Coins Valued at About $400M
- ReverseCold 9y agoOther discussion on the topic: https://news.ycombinator.com/item?id=16240874 https://news.ycombinator.com/item?id=16240874
- tannranger 9y agothis is the future of money. amazing.
- craftyguy 9y agoNo, this is pretty much the proverb "a fool and his money are soon parted" in action
- mrb 9y agoNo, 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 9y ago"lost"
- Spivak 9y agoThe 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 9y agowould 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.)
- Giroflex 9y agoSending to that new address would be public.
- Y7ZCQtNo39 9y agoYeah, but it's hard to say whether the transaction to the new address was done by a fraudster or the exchange. They can claim their private key was stolen, and it wasn't the exchange's owner, but we have no way of knowing for certain.
- deleted 9y ago[deleted]
- spilk 9y agoso? Sending to an exchange and then selling it for a discount - what exchange would say no?
- InclinedPlane 9y ago"Someone should really regulate this whole system, it's getting ridiculous."
- __s 9y agoPeople 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 9y agoTrue, but it doesn't help that exchanges are pitching themselves as a bank.
- ceejayoz 9y agoOf 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.
- AlexCoventry 9y agoDedicated hardware and encrypted backups go a long way.
- ceejayoz 9y agoSure, until this happens: http://www.dailymail.co.uk/news/article-5323601/Bitcoin-robbers-alerted-fortune-prolific-trading.html http://www.dailymail.co.uk/news/article-5323601/Bitcoin-robb... Harder to do that to an exchange.
- CryptoPunk 9y agoIf 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.
- themagician 9y agoI feel like this is the ultimate fate of every exchange that holds coins.
- JumpCrisscross 9y 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 9y agoThere 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.
- themagician 9y agoI'm not sure any amount of regulation would really solve the problem. At the end of the day someone is going to be able to see the private keys. And that's all they have to do—see it. Anyone with access to a private key can steal it at any time. It's almost the same as being able to rob a bank just by being able to look in the vault. You just need a peak, and escaping with the pot is as easy as pretty a button.
- tabeth 9y agoI 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-robberies-of-all-time-biggest-heists-in-history https://www.thrillist.com/culture/most-successful-bank-robbe...
- ikeboy 9y agohttp://bgr.com/2015/02/16/300-million-bank-theft-hackers/ http://bgr.com/2015/02/16/300-million-bank-theft-hackers/
- tabeth 9y ago100 banks to get $300M - $900M is still a lot better than a single exchange losing half a billion.
- ikeboy 9y agoWell no, their customers lost it. Unless you think the unregulated exchange is going to make them whole.
- tabeth 9y agoCan't say I understand. Didn't the exchange's customer also lose it?
- ikeboy 9y agoMoney being taken from a bank generally does not get taken from the customers of that bank, unless the bank fails. Money being taken from an exchange generally leads to customers losing it, so one could split the loss among them, the same way you split the loss among banks above
- dragonwriter 9y ago
- politician 9y ago"custodial risk"
- cryptozeus 9y agoIs it may be just may be possible that these exchanges are stealing their own money ...you it not being regulated and all ??
- danschumann 9y agoMy thoughts exactly.
- deleted 9y ago[deleted]
- Jedi72 9y agoI 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 9y agoan 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.
- Y7ZCQtNo39 9y agoAbout 73% of the principal has been recovered as of December 2017. [1] [1] https://www.bloomberg.com/news/articles/2017-12-18/madoff-victims-near-full-recovery-of-principal-with-new-payout https://www.bloomberg.com/news/articles/2017-12-18/madoff-vi...
- tednash 9y agoAre any exchanges actually built on robust decentralised infrastructure yet?
- politician 9y agoThis 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/ https://swap.tech/whitepaper/ [2] https://medium.com/@jon.doe.ethereum/airswap-a-centralized-exchange-tragedy-8c7c09a52d79 https://medium.com/@jon.doe.ethereum/airswap-a-centralized-e...
- viach 9y agoThere is also a thing called AtomicSwap https://en.m.wikipedia.org/wiki/Atomic_swap https://en.m.wikipedia.org/wiki/Atomic_swap