Tokyo court prepares to seize NEM stolen in 2018 Coincheck hack

A court in Tokyo has ordered the return of NEM stolen from digital currency exchange Coincheck, in the first court-ordered digital currency seizure of its kind in the country.

The decision comes some two years after the exchange was hacked, with the court issuing a protective order ahead of more digital currency assets being confiscated in connection with the hack.

Local press has reported that police have already begun seizing digital currency stolen in the hack. Dr. Takayoshi Doi was arrested in connection with allegedly buying $46,000 worth of NEM that had been stolen from the exchange.

The court order and the arrests concern the hack of Coincheck back in early 2018, when the exchange fell victim to the theft of 500 million NEM—worth equivalent of $530 million. The court was petitioned by the Tokyo Metropolitan Police Department to issue the protective order, with Doi indicted to protect the funds.

At the time, the hack had devastating implications for Coincheck, with reverberations throughout the digital currency world. The company has since been acquired in a rescue deal by the Monex Group, and has only gradually begun to make its services available again, as it continues to deal with the fallout of the 2018 attack.

Doi is currently on trial for violation of organized crime punishment law. If the court finds Doi guilty, he will be subject to the forfeiture of the NEM he holds, along with money held on domestic exchanges in his company’s name.

The court order could set a precedent for recovering digital currency funds as proceeds of crime in future, and could offer an additional legal layer of protection to those affected by these types of attacks.

By forcing confiscation of the funds, the court can give some comfort to the victims of attacks of this kind, who would otherwise have little prospect of seeing their digital currency again.