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Embattled cryptocurrency exchange Coincheck may soon be under new management.

The Tokyo-based exchange, now enshrined in infamy following a $530 million hack in January, will reportedly be acquired by Japanese brokerage firm Monex in a deal worth “several billion yen.”

The news was first reported by regional media outlet Nikkei, whose sources said that Monex would likely replace the current management team — who oversaw the exchange at the time of the record-setting theft — and overhaul the cryptocurrency exchange trading platform.

“We are considering the acquisition,” Monex announced in a statement, adding that plans have not been finalized.

Monex stock soared in response to the rumors, closing at 424 JPY after opening at 337 JPY — a single-day gain in excess of 25 percent.

monex
Source: MSN Money

As BlockExplorer reported, Coincheck’s security measures were found in the wake of the hack to be woefully inadequate, which explains why the hackers were able to make off with such a large amount of funds.

The country’s Financial Services Agency (FSA) ordered Coincheck and several other exchanges to enhance their systems to comply with FSA regulations, but some platform operators have found these improvement orders to be more than they can manage.

“The deal with Monex suggests Coincheck deemed it difficult to comply with the regulatory requirements and rebuild its operations without external support,” the Nikkei report said.

At least five Japanese cryptocurrency exchanges have already informed the FSA that they will cease operations, while the agency has reportedly told several others that they must voluntarily shut down or face enforcement action.

Despite the gravity of the hack, Coincheck does not appear to have been insolvent. The company has already begun compensating users who lost funds during the hack, at a rate of approximately 89 JPY per NEM token (XEM). Though somewhat less than market value at the time of the hack, this is more than triple the current NEM price.

Featured Image from Pixabay

Embattled cryptocurrency exchange Coincheck said that it will resume operations next week and immediately begin compensating users who lost funds when hackers stole $530 million worth of NEM tokens (XEM) from the exchange in January.

On Thursday, the Tokyo-based Coincheck published a statement outlining its plan to compensate the approximately 260,000 users affected by the hack and improve its security policies in advance of reopening its trading platform.

The exchange operator said that it will credit users who lost XEM during the hack with approximately 89 JPY (~$0.83) per token. Though somewhat less than XEM’s fiat value at the time of the hack, this is more than double its present value — $0.36, according to the BlockExplorer Price Index. As a result, NEM investors can repurchase their lost tokens and still have a tidy sum left over.

Coincheck also explained its plans to overhaul its security policies, which Japan’s Financial Services Agency (FSA) found to be woefully inadequate in the wake of the hack. The exchange said that it has hired new personnel to address cybersecurity threats and has also implemented the necessary measures to store most of its funds in cold wallets. As BlockExplorer reported, the exchange had inexplicably stored the majority of its funds in internet-connected hot wallets prior to the hack, which is why the hackers were able to make off with so large a sum.

Having put these measures in place, Coincheck intends to resume service next week. At present, it is only operating in a limited capacity — many of its functions, including new user registrations, remain closed.

“We will continue to do our utmost to resume the paused service and thoroughly implement the measures to prevent recurrence so as not to cause such a situation again, so that customers can use the service with confidence,” Coincheck CEO Koichi Wada said in the statement, according to a rough translation.

However, it is unclear whether Wada will remain in charge of Coincheck moving forward. According to a report from the Japan Times, the FSA has ordered the company to “conduct a drastic review on its management team,” and Wada has hinted that he might step down from his post.

Bitcoin

A new study has found that 57 Ukrainian officials have declared over 21,000 bitcoin as intangible assets over the past two years.

The study, conducted by Opendatabot, found that officials had a total of 21,128 bitcoins, reports RBC. However, it adds that the number is only an estimate.

According to the research, the greatest number of digital currency owners was found in the Odessa regional council and the Verkhovna Rada of Ukraine.

Figures from Opendatabot show that the largest number of bitcoin was owned by Golubov Dmitry Ivanovich, a People’s Deputy of the Verkhovna Rada. He declared the ownership of 4,376 bitcoins in 2015.

Urban Anatoly Igorovich, head of the Odessa Regional Council of the 7th convocation, listed that he owned 4256.3278 in 2017.

Bitcoin Cash has also been a popular cryptocurrency declared by other Ukrainian officials. So much so, that Dmitry Palpatin Viktorovich, Odessa City Council deputy, declared that he owned 7,711 bitcoin cash coins in 2017. At current market values that would put his investment at over $12 million.

Despite the study highlighting the declaration from Ukrainian officials about the ownership of digital currencies, there is still no legal status for cryptocurrencies such as bitcoin in the country.

Sergei Mitkalyk, executive director of the anticorruption headquarters, said:

National Bank of Ukraine does not recognize bitcoin as a virtual currency, money surrogate, intangible value, virtual goods, etc…Courts, considering disputes over virtual settlements, come to a unanimous opinion that the cryptography is neither a thing nor property rights and does not bear any material features at all.

Regardless of this, though, a number of bills have been passed for regulation in Ukraine, but none, so far, have passed.

The first two bills were passed in October 2017. These were introduced by a group of deputies in collaboration with the Ukrainian Blockchain Association. These were followed by a third bill in November 2017 to supplement the second bill. The bill sought to amend the tax code of Ukraine to exempt the profits made from the sale and purchase of digital currencies.

For now, it appears that the NBU is still debating the status of digital currencies in the country. However, the revelation of the ownership of bitcoin by Ukrainian officials comes at a time when the market is experiencing regulatory uncertainty and the market’s attraction among criminals.

Just today it was reported that Tokyo-based bitcoin exchange Coincheck had been hacked, resulting in the biggest crypto theft in history that saw the loss of $530 million worth of NEM.

The news of this means that even more attention will be placed on the cryptocurrency market, with the possibility of more pressure being applied for it to be regulated.

Featured image from Shutterstock.

Coincheck, the largest exchange in Japan, has been hacked, reportedly losing 530+ million dollars worth of NEM. According to Nikkei, they have reported the transfer to the Financial Services Authority and the Police. They have frozen all withdrawals at this time.

An earlier blog post announced the freeze on NEM deposits:

“Depositing NEM on Coincheck is currently being restricted. Deposits made to your account will not be reflected in your balance, and we advise all users to refrain from making deposits until the restriction has been lifted.’

Shortly thereafter, purchase and sales of NEM were halted, followed by several announcements of all withdrawals and movements of any kind being frozen.

At 2 pm UTC the NEM Foundation president Lon Wong has confirmed that the hack, calling the event ‘the biggest theft in the history of the world’.

Coincheck has expressed their intent to compensate their customers, but the practicality of this remains to be seen: (translated from Japanese via Google Translate)

History

Coincheck is a crypto wallet and exchange solution based in Tokyo and was founded by Koichiro Wada and Yusuke Otsuka in 2014. It specializes in bitcoin/ether exchange as well as fiat currencies in Japan.  As of August 2016, the exchange services over $160 million in transactions per month. More than 2200 merchants have used their bitcoin payment offering in Japan only.

In 2016 the entertainment company DMM.com opted to use Coincheck’s crypto processing solution, bringing a userbase of more than 19 million. Coincheck also has with Chinese, Hong Kong, and Taiwan investors through SEKAI in order to support the purchase of real estate using Bitcoin.