The funds were stolen from a hot wallet
that contained five cryptocurrencies including Bitcoin and Bitcoin Cash.
Binance said the theft hit its "hot wallet
" for storing cryptocurrency, which accounts for about 2 percent of its total bitcoin holdings.
Five hundred twenty three million NEM coins (known as XEM) had been stolen from a hot wallet
(a wallet connected to the Internet) allowing hackers to drain the coins into a separate account.
A 'hot wallet
' is Internet-connected and used to store cryptocurrencies used for day-to-day transactions.
Cotten was evidently the sole person responsible for transferring funds between the companys "cold wallet" secure, offline storage and "hot wallet
," or online server, according to court documents.
definition of a hot wallet
is one connected to the internet, while a
said a server for its Zaif exchange was hacked for two hours last week, and some digital currencies got unlawfully relayed from what's called a "hot wallet
," or where virtual coins are stored at such exchanges.
A total of 523 million tokens were stolen from company's "hot wallet
The stolen Coincheck money is thought to have been kept in a "hot wallet
" in the internet - as opposed to a cold wallet where funds are stored offline.
However, Bangs said the crime insurance market is willing to deal with the risks of cold wallet or offline exposure, which is extremely secure, but has very little appetite for hot wallet
or online exposure, since it is greatly exposed to hacking and the potential for cyberattacks.
Bitcoin can be kept in cold storage (think savings account) or in a "hot wallet
" (think the wallet in your pocket).
The currencies stolen from the exchange's hot wallet
mostly include bitcoin, monacoin, and bitcoin cash.