NEM Foundation, responsible for promoting the NEM blockchain platform, has announced that it will stop tracking NEM cryptocurrencies stolen from Coincheck cryptocurrency exchange. The organization also said on Tuesday that it had given actionable information from its investigations to law-enforcement authorities.
According to reports by Japan News, the Singapore based organization did not give further details or reasons why it decided to discontinue the tracking.
Coincheck Heist and NEM tracking
The NEM Foundation built in a special feature into the blockchain which allows them to flag cryptocurrencies and identifies accounts the flagged coins were sent to. Following the hack attack on Coincheck exchange in which $550 million worth of NEM (XEM) coins were stolen, the foundation kept track of transactions involving the flagged accounts.
It appears tracking has not stopped the fraudsters from cashing out their loot. Japan Times suggests that about half of the coins stolen in January have already been laundered on the darknet. Speaking to JT, cybersecurity expert and CTO at Japan Digital Design, Masanori Kusunoki claimed the coins have been converted to other cryptocurrencies or fiat money.
We have seen a similar suggestion from security experts in Canada who claimed the coins were being laundered in an unnamed crypto exchange in Canada and sent back to Japan. If these reports are true, then the Foundation’s decision to halt tracking could be an admittance that the coins may be gone for good. Kusunoki was of the opinion that tracking the coins was becoming more difficult.
Coincheck compensates hack victims
Coincheck exchange has braced up for life after the devastating hack. While promising to fulfill all the improvement orders it received from Japan’s Financial Service Agency (FSA), they began paying owners of the missing coins as they resumed operations. But this is not business as usual as the exchange stopped the trading of Monero (XMR), Dash (DASH) and Zcash (ZEC) concerned that they have high levels anonymity.