According to the financial report posted by Monex Group, Coincheck has faced a 66% decrease in revenues for the third quarter of the year 2018 as compared to the revenues of the second quarter.
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.
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.
This gives us a brief overview on what caused the staggering low revenue generation in the third quarter of the year in comparison to the second quarter. The loss was recorded as a result of the unknowing of Coincheck when they only allowed their existing customers to sell their cryptocurrency on the forum. This limited the financial activities on Coincheck and ended up in a massive decline worth $5.3 million between two quarters.
On a more positive note, despite the decrease in the revenue generation of Coincheck in the third quarter, it is also true that Monex Group has since then managed to minimize the general and administrative expenses by nearly 17% as opposed to the second quarter.
Another fact mentioned in the reports of Monex Group is that there are approximately 1.7 million Coincheck users currently who are young and according to claims by Monex Group, this number is expected to increase in future.
After receiving a business improvement order from the Japanese regulator, Financial Services Agency (FSA) due to the hack worth $532 million of NEM, actions have been taken since then to address security vulnerabilities and governance improvements.
A series of events led to the massive decrease in the revenues of Coincheck in the third quarter of 2018, however, to overcome those issues, Monex Group has been taking profound steps and looks to increase their revenues in the following quarter of the year.
Some noticeable steps taken by Monex Group include the betterment in the management system of the organization. Monex has also looked to build developments in the security system by enhancing the anti-money-laundering and counter-terrorism financing systems of the company. Moreover, the risks that come with each crypto subscription have also been thoroughly revised by Monex.
Furthermore, reports suggested in April that Coincheck made an approximate $490 million from April 2017 to January 2018 before the occurrence of the highest ever recorded hack in the world of crypto. During that time, Monex Group reported that Coincheck owed its customers who were affected by the hack around $432 million in the fiscal year that ended this March and even after refunding the customers, Coincheck made it through the year positively.
Therefore, since Monex Group’s take over, it is safe to say that the company is moving towards betterment by making advancements in its critical systems which may give breathing space to the consumers. But the question that rises primarily is the concern whether Monex Group will be able to overcome the 66% decline it faced in the financial market and how will it progress financially from there. Should we expect to see improvements in the fourth quarter? We will leave that to time.