The Japanese official regulator, Financial Services Authority (FSA) gives Coincheck license to operate in cryptocurrency exchange within Japan, as announced by the authority a few hours ago.
Coincheck is a bitcoin wallet and exchange service headquartered in Tokyo which operates exchanges between bitcoin, ether and fiat currencies in Japan, and bitcoin transactions and storage in some countries.
On April 16th, Monex Group took over Coincheck as a wholly owned subsidiary after Coincheck faced a tremendous blow worth $532 million of NEM which was stolen from Coincheck’s wallets. This setback urged Coincheck to review its management, and thus, this resulted in the ownership of Monex Group for $33.5 million.
After taking over the company, Monex Group looked thoroughly into the financial activities of Coincheck and found out that during the second quarter of the year 2018, Coincheck made revenues worth $8.3 million but went through a major decline of around 66% in the third quarter of the year, recording revenues of only worth of $2.8 million. The report highlights the following information:
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.
Since then, the company has made a remarkable comeback in the industry and is now one of the official legalized operators in cryptocurrency exchanges in Japan. The company’s revival in the world of trade is a noticeable one and one it must be proud of. To be hacked and have taken away hold of your assets worth that much and then picking yourself up again in a market that is growing every day is a massive achievement in itself.
From the time the company was hacked, it has worked on to pay refunds to its consumers who were effected by the hack last January. Not only did it pay the customers their stolen money back, the company also put new regulations in order to avoid further fraudulent activities that would cause harm to the organization and its customers.
Coincheck introduced new sign ups and deposits for consumers for better safety measures and withdrew from some digital currencies which they thought were at risk of giving rise to hacks and could have been responsible for damage.
The Japanese regulators have given thought to introducing schemes for providing licences to the cryptocurrency operating exchanges considering the threats to their current security systems. The increased legislation followed by numerous fraudulent events in the world of crypto may have stopped large scale hacks but despite these implementations, the small scale hacks are still damaging the ecosystem.
A company that was recently a victim of such hacks was Zaif, a Japanese cryptocurrency exchange that handles currencies including Bitcoin, Bitcoin Cash and Monacoin. The Japanese digital currency operating exchange faced a huge blow in the market as hackers stole “4.5 billion yen from users’ hot wallets, as well as 2.2 billion yen from the assets of the company, with total losses amounting to 6.7 billion yen or around $59.7 million”, reported on 19th September, 2018.
Similarly, numerous other cryptocurrency exchanges not only in Japan but throughout the world are under the radar for facing akin blows. Thus, to avoid such activities, regulatory authorities and organizations must collaborate and execute processes that would enhance the security systems of digital currency operating exchanges all around the globe.
As a result of these events, the South Korean government has taken sharp actions and has approved the security policies of 1/3rd of the cryptocurrency operating exchanges in South Korea. While seven out of twenty-one of the cryptocurrency exchanges in South Korea were successful in acquiring approval from the government, the rest of the fourteen exchanges failed to meet the criteria.