The multi-million dollar security breach at Japan’s Coincheck cryptocurrency exchange shocked with world.
While Coincheck is still investigating the issue, it has announced a refund for all its users through the money it has in its reserves. While users are being taken care of it through this means, regulatory pressure is something that the company needs to deal with very carefully. The local financial regulator ordered the company to get its act together. A very strong warning not to be taken lightly.
Japan’s Financial Services Agency ordered Coincheck to step up their game sooner rather than later. Cryptocurrencies are considered to be a legal form of money in Japan. As such, all cryptocurrency exchanges need to register with the government. Coincheck is one of the few companies able to bypass this requirement due to their long-standing reputation in the industry. This is why the FSA is a bit more lenient when it comes to this particular exchange. That doesn’t mean Coincheck can leave things go unpunished, though. They will need to come up with a solution to prevent future incidents like this one.
Coincheck hack has gone down a bit differently than people would expect as none of the stolen money has been sold or sent to other wallets. Unfortunately, the exchange is unable to reclaim the money directly, which poses a big problem. It is evident this situation needs to be resolved sooner rather later. For now, it remains to be seen what the future holds for Coincheck in this regard. Criminals will not stop targeting cryptocurrency exchanges anytime soon.
Cryptocurrency exchanges are a prone target for criminals of all kinds. This is also the second time in history one of the biggest Japanese exchanges gets hacked. For Coincheck, stepping up their game is of the utmost importance right now. Protecting consumer assets and securing the platform are the top priorities moving forward.