Tokyo police arrested two men on Wednesday for alleged possession of NEM, a cryptocurrency, which that they knew was stolen during a massive cyberattack on a Japanese crypto exchange in 2018.
The Metropolitan Police Department arrested two persons in their 30s, one from Hokkaido and the other from Osaka for the suspected dealing in crime proceeds, a violation of a law targeted at organised crime.
The suspects reportedly knew that the cryptocurrency they acquired was part of the ¥58 billion ($530 million) worth of stolen NEM from cryptocurrency exchange operator Coincheck Inc. on Jan. 26, 2018.
According to the Tokyo police’s cybercrime unit, the two suspects obtained the stolen NEM on a website on the dark web. The website claimed that it would exchange other cryptocurrencies for NEM at a preferential rate. In the incident, almost all NEM owned by Coincheck’s clients was fraudulently accessed and stolen, leaving them in total frustration.
The Coincheck hack is one of the largest in the history of cryptocurrency exchange thefts. With the trail allegedly leading to Russia-based attackers. Tokyo police allocated approximately 100 investigators to the case. Authorities are continuing investigations on other alleged buyers of the stolen NEM.
The stolen tokens were reportedly exchanged for Bitcoin or Litecoin and dispersed over 13,000 wallets.
Investigators appear to have shifted their focus now as they target those who purchased the tokens. The practice of buying stolen goods to resell them at a profit is called fencing and is considered a crime in most jurisdictions.
Cryptocurrency advocates often believe that “transparent” coins such as Bitcoin or NEM lack fungibility, which could result in users unwittingly becoming “fencers” of stolen coins.