Coincheck Security: What Happened and How It Changed Crypto Safety

When Coincheck security, the cryptocurrency exchange based in Japan that once held over $500 million in user funds. Also known as NEM exchange, it was one of the most trusted platforms in Asia until a single flaw wiped out $534 million in NEM tokens in minutes. This wasn’t a hack by some shadowy group—it was a failure in basic custody practices. Coincheck stored nearly all its users’ crypto in a hot wallet, unprotected by multi-signature or cold storage. No separation of duties. No real-time monitoring. Just a single key, sitting online, waiting to be stolen.

The crypto exchange hack, the largest single theft in cryptocurrency history at the time. Also known as Coincheck NEM hack, it forced regulators in Japan to rewrite the rules for digital asset platforms overnight. After the breach, Japan’s Financial Services Agency demanded all exchanges use cold storage for 95% of assets, require multi-sig approvals for withdrawals, and submit to third-party audits. That’s why today, if you use Binance, Kraken, or Coinbase, your crypto isn’t sitting in an unlocked digital safe—it’s locked in offline vaults, split across multiple keys, and tracked by security firms. Coincheck didn’t just lose money. It lost trust. And that loss became the blueprint for what every exchange must now do to stay alive.

The crypto custody, the practice of securely storing digital assets on behalf of users. Also known as digital asset storage, became the most important feature in crypto—not trading fees, not coin selection, not speed. If you don’t know where your coins are and how they’re protected, you don’t own them. You’re just trusting someone else’s system. Coincheck’s mistake wasn’t technical—it was cultural. They treated crypto like bank deposits, not digital property. That mindset still exists today on smaller exchanges. Some still use hot wallets for convenience. Some still skip audits. Some still promise high yields with no clear backup plan. The Coincheck breach didn’t end crypto theft. But it made it harder. And it taught users: if an exchange won’t explain how they store your coins, walk away.

Below, you’ll find real stories of exchanges that failed, hacks that slipped through, and platforms that got it right. You’ll see how one breach changed everything—and why your next crypto choice matters more than ever.