NEM cryptocoin struggles to recover from theft

Back on January 26th the Japanese cryptocurrency exchange Coincheck was hacked with a loss of $523 million of NEM (XEM) coins worth about $534 million US at the time.

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Theft of NEM coins and Coincheck exchange

Only NEM coins were stolen. The NEM team decided not to solve the problem by a hard fork since the the theft was the result of lax security by Coincheck rather than security problems with the NEM platform. NEM is instead creating an automated tagging system. The system will follow the money and tag any account that receives tainted funds.

As reported in a recent Digital Journal article, the Japanese Financial Services Agency (FSA) raided Coincheck on Friday. Japanese Finance Minister Taro Aso announced that an investigation had been launched to preserve client assets.

Earlier this week, the FSA gave Coincheck until February 13 to investigate the cause of the incident, strengthen risk management and adopt preventative remedies.

Coincheck has said it will use its own funds to reimburse all of its 260,000 customers who lost holdings, at a rate of 88.549 yen per NEM costing the firm about 46.3 billion yen or $422 million US.

NEM

Wikipedia describes NEM as follows:NEM is a peer-to-peer cryptocurrency and blockchain platform launched on March 31, 2015.[1] ... NEM has a stated goal of a wide distribution model and has introduced new features to blockchain technology such as its proof-of-importance (POI) algorithm, multisignature accounts, encrypted messaging, and an Eigentrust++ reputation system. The NEM blockchain software is used in a commercial blockchain called Mijin,[4] which is being tested by financial institutions and private companies in Japan and internationally.[5]

Wikipedia describes the EgenTrust algorithm:EgenTrust algorithm is a reputation management algorithm for peer-to-peer networks, developed by Sep Kamvar, Mario Schlosser, and Hector Garcia-Molina.[1] The algorithm provides each peer in the network a unique global trust value based on the peer's history of uploads and thus aims to reduce the number of inauthentic files in a P2P network.

The NEM mission

The NEM Foundation has its own website setting out its vision for NEM.

The Foundation is incorporated in Singapore. The sole purpose of the foundation is"to introduce, educate, and promote the use of the NEM blockchain technology platform on an international scale to all industries and institutions." The Foundation claims that its blockchain technology can alter the manner every industry operates:"The Foundation details the opportunities in every industry to effectively store transaction, customer, and supplier data in a transparent immutable ledger."

NEM is one of several cryptocoin platforms who are seeking to develop positive relations with government, main stream finanbcial institutions, and academia, seeing its role as providing blockchain solutions to their problems.

Present price of NEM.

According to CoinMarketCap the present price off NEM is $0.5572958. Its market cap is $5,156,621,999. This is a far cry from an earlier high and down more than 11.0 percent on the day. Most cryptocoins are down on the day, includiing bitcoin.

Previously published in Digital Journal