![]() Images courtesy of Bitcoinist archives, and Pxhere. What do you think about Coincheck reimbursing its users? Were you one of the 260,000 affected by the hack? Let us know in the comments below. The Japanese cryptocurrency exchange Coincheck is trying to get back on its feet after losing more than 500 million worth of NEM XEM, 42.66 in a January cyber attack. Exchanges operating in Japan are supposed to have adequate security to prevent such attacks. The Japanese Financial Services Agency (FSA) is also considering some sort of administrative punishment, such as a fine, for the hack. The calculation method for the coin amount is based upon the weighted average price of NEM, which constitutes the prices from the suspension of new purchases to the time of the reparation announcement.Īnother sting is likely waiting for the crypto exchange. The actual method for applying the reimbursement, as well as the time it will take place, has not yet been determined. Reparations will be made in JPY coins that will be paid into a Coincheck wallet. In moving towards reopening our services, we are putting all of our efforts towards discovering the cause of the illicit transfer and overhauling and strengthening our security measures while simultaneously continuing in our efforts to register with the Financial Services Agency as a Virtual Currency Exchange Service Provider. Politicians meeting last week at the World Economic Forum in Davos issued warnings about the dangers of cryptocurrencies, with the US Treasury secretary, Steven Mnuchin, relating Washington’s concern about them being used for illegal activity.We realize that this illicit transfer of funds from our platform and the resulting suspension in services has caused immense distress to our customers, other exchanges, and people throughout the cryptocurrency industry, and we would like to offer our deepest and humblest apologies to all of those involved. Coincheck’s application, submitted in September, is pending. Pre-existing operators such as Coincheck have been allowed to continue offering services while awaiting approval. Japan started to require cryptocurrency exchange operators to register with the government last April. Local media said the Financial Services Agency was expected to take action against Coincheck, which calls itself “the leading bitcoin and cryptocurrency exchange in Asia”. On Sunday, major newspapers in the country labelled the management of virtual currencies at Coincheck as “sloppy” and said the company had “expanded business by putting safety second”. Many Japanese people, especially younger investors, have been seduced by the idea of strong profits as the economy has seen years of ultra-low interest rates offering little in the way of traditional returns. Nearly one-third of global bitcoin transactions were denominated in yen last month, according to the specialist website .Īs many as 10,000 businesses in Japan are thought to accept bitcoin, and bitFlyer, the country’s main bitcoin exchange, saw its user base pass the 1 million mark in November. MtGox’s high-profile demise failed to dampen the enthusiasm for virtual currencies in Japan, which became the first country to define cryptocurrencies as legal tender in April last year. The Tokyo-based bitcoin exchange collapsed after admitting that 850,000 coins, worth around $480m at the time, had disappeared from its vaults. The resulting 58bn yen loss exceeded the value of bitcoin that disappeared from MtGox in 2014. On Friday, the company detected an “unauthorised access” of the exchange and later suspended trading for all cryptocurrencies apart from bitcoin.Ĭoincheck said its NEM coins were stored in a hot wallet instead of the more secure cold wallet, which is kept offline, because of technical difficulties and a shortage of staff capable of dealing with them.
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