Coincheck, a popular Japanese cryptocurrency exchange, confirmed on Friday that it has fallen victim to one of the biggest cryptocurrency hacks in digital currency history, a crypto heist that tops the notorious 2014 Mt. Gox incident.

During a late-night press conference, Coincheck president Wakata Koichi and Chief Operating Officer Yusuke Otsuka estimated the exchange had lost at least $400 million worth of the NEM cryptocurrency’s XEM tokens.

As a result, Coincheck has halted all operations and the price of XEM has tumbled nearly 10 percent at the time of writing. NEM is the tenth largest cryptocurrency according to CoinMarketCap.

Lax security measures protecting this smaller cryptocurrency seem to be at the root of this issue. Yuji Nakamura, a Bloomberg tech reporter based in Tokyo, attended the Coincheck press conference and tweeted the exchange was not using multi-signature — an additional layer of security for cryptocurrency transaction — for XEM transfers.

Long Wong, the president of the NEM.io Foundation — the group that started XEM — echoed Nakamura’s assertion in a statement.

“As far as NEM is concerned, tech is intact,” Wong told Cryptonews. “We are not forking. Also, we would advise all exchanges to make use of our multi-signature smart contract, which is among the best in the landscape. Coincheck didn’t use them and that’s why they could have been hacked. They were very relaxed with their security measures.”

At this time it is unclear how this hack was carried out, but in the same statement Wong claimed that the tokens were all stolen using one account.

This attack dealt a devastating blow to the Japanese cryptocurrency market, who is no stranger to multimillion dollar heists like this one.

Back in 2014, Mt. Gox, a bitcoin exchange that once handled over 70 percent of all bitcoin transactions worldwide was robbed of 850,000 bitcoins — with an approximate value estimated at $350 million.

There have been multiple instances of high-profile exchanges being hacked and defrauded millions of dollars worth of cryptocurrency. A recent one involved NiceHash, a Slovenian mining market, which lost $78 million in bitcoin in a heist last year.

These crypto-heists should be a huge red flag for exchanges and other businesses in the sector to seriously step up their security measures, else they risk making a market that has already been plagued with volatility more unstable than ever.

Photos via Flickr / medithIT