Tokyo-based cryptocurrency exchange Coincheck has announced that it is to accept a takeover offer from Japanese online brokerage Monex Group.
At the end of January, Coincheck became the victim of a hack that saw thieves siphoning off $530 million worth of XEM, the native token for the NEM platform, making it the biggest hack of its kind. What followed was a firmer hand being applied by the country’s financial watchdog, the Financial Services Agency (FSA), who undertook onsite inspections at Japanese cryptocurrency exchanges.
Now, according to a report from the Nikkei Asian Review, the exchange will be shuffling its management in a bid to regain trust among customers again. Toshihiko Katsuya, Monex chief operating officer, is expected to take over as the new company president. It’s reported that he is a good choice in rebuilding trust due to his experience as president of the online brokerage.
Under the new management, Coincheck will receive fresh capital that amounts to several billion yen from Monex. Details of the exact amount have yet to be finalised; however, it’s expected that this will be revealed as early as tomorrow.
Since the hack at the Japanese exchange, the FSA has presented it with two improvement orders, demanding an overhaul of its operations and clarification of management responsibility. After the hack Coincheck vowed to reimburse 260,000 of its customers, which it has since done. Several lawsuits prior to the reimbursements were issued from disgruntled customers who wanted their frozen assets returned to them.
Before the hack, Coincheck was permitted to operate as an exchange within Japan while its application to become registered was being reviewed by the FSA. The exchange was one of 16 unregistered that were given this approval. A further 16 others have been registered within the country. Notably, while Coincheck is still seeking registration, the financial watchdog has yet to make an official decision on whether it can continue operating. According to the report, the FSA will determine whether it qualifies after it reviews its operation with Monex.
Such is the pressure that some exchanges are facing since the hack and the demand that the FSA is placing upon them to ensure they are running a tight ship, that several have withdrawn their applications and have ceased operating. Last month, it was reported that two Japanese cryptocurrency exchanges – Tokyo GateWay and Fukuoka-based Mr Exchange – were withdrawing their applications to register with the regulator. So far that brings the total number to have closed in the country to five. The other three being Raimu, bitExpress, and Bit Station.
Featured image from Flickr via Richard-G.