[White Hat] Hackers Join Search for $530 Million in Stolen Cryptocurrency

White hat hackers have been instrumental in investigations regarding last month’s breach of the Coincheck exchange.

The community members have helped track down the $538m of NEM cryptocurrency that was stolen from the Tokyo-based exchange. The ethical hackers have assisted authorities and encouraged others to join in providing aid. One prominent white hat known by the Twitter handle JK17 managed to identify the accounts that the stolen money was sent to shortly after the breach. The information was shared with the NEM foundation, and the accounts have been marked and are currently being monitored. The funds have now been moved to over 400 accounts including some owned by innocent holders, in what appears to be an attempt to confuse trackers.

However, many more white hats have reportedly joined the hunt, making short work of the task. Shota Hamabe, a 34-year-old programmer is one such individual. Shortly after the breach, he held an information session at Hackers Bar, a restaurant and IT hub in Tokyo’s Roppongi district, to coordinate and discuss options.

Whilst JK17, Hamabe and others have been highly effective in locating and flagging the accounts where the stolen NEM has been moved to, efforts to identify the owners of the accounts, (the hackers responsible), have been unsuccessful. It was reported that one NEM trader had been questioned by Tokyo police regarding the incident, however, no further information has been provided regarding the individual’s involvement. Officers are also analyzing access logs in Coincheck’s system in an attempt to identify the culprits, but this may be a lengthy process. Meanwhile, it appears that nearly 9 billion yen ($83.6m) worth of NEM is believed to have been exchanged for Bitcoin and other virtual currencies using the dark web and other anonymous services. It remains to be seen whether the hackers will be brought to account.

The exchange is assisting in the efforts and has promised to compensate all traders who have been affected by the breach in full. It’s a move that the company hope will save it’s reputation and public image, however, users of the platform are voicing their increasing concerns. Last week a group of Coincheck traders initiated a lawsuit against the service, voicing their outrage that withdrawals for cryptocurrencies not affected by the breach had still not been reopened.

Whether or not the thieves are apprehended, the work of white hat hackers serves as a reminder that the cryptocurrency communities and cryptocurrencies themselves also can be highly positive. Hamabe told reporters that:

“The incident has created a negative image of virtual currencies, but I believe they can make a huge difference in the way we transmit data and handle business.”

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