Coincheck Is Cautious About Reopening After A Hack Of $500 Million

Nov 1, 2018 at 17:30 Update Date :Nov 15, 2018 at 13:09 UTC

Coincheck, a bitcoin wallet and exchange service headquartered in Tokyo, Japan is not sure about reopening an exchange after a loss due to hack of $500 Million in January.

Oki Matsumoto, the President of Coincheck said that he doesn’t know the prospectus of reopening, as reported by MineCC, a cryptocurrency miner and analyst in situated Japan.

Coincheck faced the largest loss due to improper security in the history of the entire cryptocurrency market. The tragedy took place nine months ago and the company suffered a loss of $500 Million to an unrecognized group of hackers. Coinchain lost XEM, the native currency of the NEM blockchain.

Due to the huge loss, Coincheck was unable to repay its investors. In order to compensate its investors, Coincheck came up with an agreement with a publicly listed company in Tokyo, Monex. Monex helped Coincheck to pay its investors the required amount and to obtain sufficient funds.

Coincheck was further investigated by the law, police agencies, intelligence agencies and the Japanese government to ensure that no portion of the funds was kept by the company when it was asked to compensate its investors. Consequently, Coincheck lost its cryptocurrency exchange license in Japan.

In order to operate as a crypto firm again, it will have to reapply for its license. Until the Financial Service Agency (FSA) and the country’s financial head doesn’t grant the company its license to run as a fully regulated and compliant exchange, it will not be able to indulge in open exchanges and accommodate new users.

The chances of obtaining an approval license from the FSA remain notably low for Coincheck. This is because a large number of investors were affected by the hack.

FSA has to remain cautious and ensure that such scams do not affect the investors. Stricter regulatory frameworks have been implemented by it. The Coincheck has is the major reason behind its growing alertness and stricter actions.

Coincheck will only be able to obtain its license if it succeeds to make FSA believe that it has revived its security measures and overhauled its internal management system.

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