April 17, 2018By Nathan Bentley
“Another reason distressed exchanges appear as great takeover candidates after a hack is because of the reputational damage done to the incumbent management team. In the case of Coincheck, for example, its CEO admitted to astounding security lapses — revealing that the half-a-billion dollars’ worth of stolen XEM was sitting in a hot wallet at the time it was lifted — in addition to admitting that the hot wallet in question wasn’t even using multi-signature authentication. Such incompetence leaves shareholders and customers alike looking for the reassurance that new management might bring, along with a strong brand name (in the case of Monex, for example) to win users back.”Even a failing exchange has an infrastructure and a customer base, ready to reimagine and ready to reinvigorate. I see it like this, in both instances. Imagine wanting to paint a picture, but not knowing much about painting. Meanwhile, an expert has started a picture, created a following and then just happened to lose their pencil half way through, all’s you need to do is fill in the blanks and there, you have a perfect painting. You can compensate the artist for their efforts but, eventually make a greater profit for the finished piece. That’s the logic that I think drives firms that want to buy cryptocurrency exchanges and football teams. You never know, maybe one day a football team will buy out a cryptocurrency exchange, wouldn’t that be interesting. This is a bit novel, I’ll admit, but I am trying to highlight exactly why it is a lucrative opportunity and not complete nonsensical madness buying out a failing cryptocurrency exchange, as unfortunately many critics do exist and like to pass pessimism over acquisitions such as the recent move by Monex.