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Author Topic: Japanese Crypto Exchanges Strengthen Self-Regulation Following Coincheck Hack  (Read 25 times)
alyssa85
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January 29, 2018, 12:41:25 PM
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https://news.bitcoin.com/japanese-crypto-exchanges-self-regulation-coincheck-hack/

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The Japan Blockchain Association (JBA) has previously established self-regulation standards which its cryptocurrency exchange members voluntarily adopt. The standards include “the maintenance of cold wallet, etc., under the consent of the related members,” the association announced on Saturday after one of its members, Coincheck, suffered a hack which led to an approximately 58 billion yen loss on its platform.

The association currently has 127 members, 15 of them are crypto exchange members and 35 are blockchain members. Among crypto exchange members are Bitflyer, Coincheck, GMO Coin, and Bitocean. Bitflyer CEO Yuzo Kano is the association’s representative director. According to the JBA’s announcement:

        The fact that the maintenance of the cold wallet was delayed caused the current illegal outflow. It is very regrettable.

Japanese Crypto Exchanges Strengthen Self-Regulation Following Coincheck HackThe association noted that the Japanese Financial Services Agency (FSA) has alerted the representatives of each cryptocurrency exchange regarding their security. “We are looking for further measures,” the JBA emphasized, adding that its crypto exchange members have been told to “check the status of [their] security based on the possibility of cyber attack.” The association noted:

        In the future, in order to appropriately secure the security of virtual currency exchange traders…we will establish stricter voluntary regulations and seek compliance with members.

It looks like the hack is down to someone accessing the cold wallet - an insider?

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January 29, 2018, 01:45:14 PM
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It looks like the hack is down to someone accessing the cold wallet - an insider?
It's easy to throw with assumptions, but I have the impression that it was an insider as well. I however have been reading various articles, and the majority of them hint towards a hot wallet that has been hacked, and not the cold wallet.

https://www.cnbc.com/2018/01/28/coincheck-nem-hack-unlikely-last-for-cryptocurrency-space-analyst.html

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Coincheck management said in a press conference last week that it held the NEM coins in a "hot" wallet, referring to a method of storage that is linked to the internet — a method that was "not industry standard," according to Colas.
The only question that I keep asking myself is why on earth does an exchange have $500M worth of crypto assets sitting in hot wallets?! It's not that NEM is so insanely popular that they want to provide people instant withdrawals. It's so suspicious, that this strongly reeks of an inside job, where the crypto assets have been made easily accessible for the "hackers".

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January 29, 2018, 07:30:23 PM
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All the hacks and flash crashes, even the Coinbase Bitcoin Cash scandal - they may not have been direct inside jobs but they can always be pinpointed to someone on the inside, from facepalm moments to just pure ignorance and negligence (how the hot wallet could have so much in it, for example). You'd think Mt Gox would have already taught a lot of lessons, so it's pure lip service when exchanges say they're taking note and tightening up in the wake of such hacks (purported or otherwise).

I'm willing to bet a lot of operations like these run with shocking disregard for security and basic safety checklist measures. The human elements of being error-prone and eventual lapse of judgement is too high to not implement the strictest of controls.

What will be interesting from here: will the regulations have resulted in proper insurance? As far as I know, all approved exchanged, including Coincheck, should have been insured already.


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January 30, 2018, 06:42:12 AM
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https://news.bitcoin.com/japanese-crypto-exchanges-self-regulation-coincheck-hack/

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The Japan Blockchain Association (JBA) has previously established self-regulation standards which its cryptocurrency exchange members voluntarily adopt. The standards include “the maintenance of cold wallet, etc., under the consent of the related members,” the association announced on Saturday after one of its members, Coincheck, suffered a hack which led to an approximately 58 billion yen loss on its platform.

The association currently has 127 members, 15 of them are crypto exchange members and 35 are blockchain members. Among crypto exchange members are Bitflyer, Coincheck, GMO Coin, and Bitocean. Bitflyer CEO Yuzo Kano is the association’s representative director. According to the JBA’s announcement:

        The fact that the maintenance of the cold wallet was delayed caused the current illegal outflow. It is very regrettable.

Japanese Crypto Exchanges Strengthen Self-Regulation Following Coincheck HackThe association noted that the Japanese Financial Services Agency (FSA) has alerted the representatives of each cryptocurrency exchange regarding their security. “We are looking for further measures,” the JBA emphasized, adding that its crypto exchange members have been told to “check the status of [their] security based on the possibility of cyber attack.” The association noted:

        In the future, in order to appropriately secure the security of virtual currency exchange traders…we will establish stricter voluntary regulations and seek compliance with members.

It looks like the hack is down to someone accessing the cold wallet - an insider?

This is what is expected to happen and even beyond the self regulation that they are now proposing they should equally be more concerned about making people responsible for the hack as well as putting plan in place in other to compensate those who lost their funds and forestall situation like this because any thing short of that, is a waste or energy and resources as another one is about to happen and the same story will repeat itself again.

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