Crypto Exchange Debates Reopening After Hack

Published 5 years ago on November 01, 2018

Crypto Exchange Debates Reopening After Hack

The infamous crypto exchange Coincheck is unsure about whether it should reopen after it was hacked and left $500 million lighter. According to multiple local sources, the massive Japanese crypto exchange, Coincheck is debating whether it should reopen after suffering a $500 million hack back in January this year. MineCC, a cryptocurrency miner and analyst based in Japan, reported that the president of Coincheck Oki Matsumoto said that he doesn't know the prospectus of reopening. At the start of the year, the biggest security breach in the history of the crypto market occurred with Coincheck losing more than $500 million in XEM, the native currency of the NEM blockchain, to an unknown group of hackers. After Coincheck wasn’t able to compensate all the investors affected by the hack, the crypto exchange reached a deal with a publicly listed firm in Tokyo, Monex. This was in order to obtain sufficient funds to refund its investors. The investigation into Coincheck involved law enforcement, local intelligence agencies and the Japanese government in an attempt to salvage any portion of the stolen funds to compensate those who affected on the platform. Following the incident, Coincheck saw its license get taken away so they couldn’t operate as a digital currency exchange in Japan and was requested by the government to re-apply since a new executive took over the company. Until the exchange is granted a license by the countries main financial watchdog, the Japanese Financial Services Agency, the platform will not be able to bring in new users and open the exchange to be public This week the public listed firm in Tokyo, Monex disclosed that throughout the summer this year, the platform allowed existing investors to sell their assets on the exchange.

“Since service suspension in January 2018, Coincheck only allowed existing customers to sell their cryptocurrency. This limited revenue stream resulted in segment loss of ¥ 0.6 B [around $5.3 million]. Coincheck has improved in governance, internal control and internal audit, aiming for full-service resumption.”

The odds that Coincheck will obtain approval are quite low in all honesty and given the magnitude of the security breach and the number of investors that were affected by the hack. As said by CCN:

“The FSA emphasized that it intends to implement stricter regulatory frameworks in regards to the security and internal management systems employed by trading platforms, and the Coincheck hack was the catalyst behind the decision of the FSA to stricken existing regulations surrounding the crypto market.”

What are your thoughts? Let us know what you think down below in the comments!

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Robert Johnson

Robert first came across Bitcoin in 2016 during a meetup in Belgium, and has been hooked ever since. With a background in Economics, you can find Robert frequently looking at the Twitter feed of the SEC for any regulatory updates relating to Bitcoin and Crypto in general.

Crypto Exchange Debates Reopening After Hack

Robert Johnson

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