Japanese Regulators Visit Coincheck Offices …

Japanese regulators visited Coincheck offices with verification

The recent hack of the Japanese exchange Coincheck turned out to be quite a remarkable event. Hackers managed to steal $ 530 million in NEM cryptocurrency at the exchange rate at the time of the hack. Taking into account the seriousness of the incident, the Japan Financial Services Agency (FSA) decided to go beyond the measures taken immediately after the hack and personally check the offices of Coincheck. Writes about this Nikkei.

Coincheck promised to pay affected users $ 425 million, that is, about 90% of the stolen amount, which in this case is better than nothing..

The FSA, in turn, imposed a rather mild penalty. In fact, the regulator demanded only to strengthen security measures in order to prevent a similar situation from recurring in the future, and to provide a written report on the incident by February 13.

However, later, the department decided to expand the list of preventive measures and visit the offices of Coincheck to make sure that the exchange has the funds necessary to pay the affected users, primarily in yen..

Another reason for the audit, the publication calls the regulator’s desire to make sure that the exchange has really strengthened the protection of its systems, and to find out how the hack happened at the scene. As noted by Nikkei, one of the reasons for the hack was the way virtual currencies were stored on Coincheck: NEM wallets maintained a constant connection to the Internet, while many exchanges use cold storage to store such large amounts..

Japanese Regulators Visit Coincheck Offices ...

This episode marks the first face-to-face audit of a cryptocurrency exchange by Japanese regulators. Commenting on what is happening, Finance Minister Taro Aso said: “The investigation is in the interests of users.” He also demanded that exchanges treat clients “appropriately” and report on what they are doing to minimize risk..

The FSA introduced an exchange licensing system in April 2017, but Coincheck remains the only major exchange in Japan to operate without a license. Regulators have been considering her application since last year.

Japanese Regulators Visit Coincheck Offices ...