[2018-02-02] Japanese Authorities Raid Hacked Coincheck Exchange

[nickbelski]

Japan’s Financial Services Agency raided the offices of the hacked Coincheck cryptocurrency exchange to see if they had adequate funds to repay customers.

The recent hack of the Coincheck cryptocurrency exchange in Japan sent a shock wave through the crypto world. The total value of the loss was staggering, coming in at around $530 million. The Financial Services Agency (FSA) originally gave the exchange essentially a slap on the wrist, but due to the seriousness of the situation, FSA regulators raided the offices of Coincheck today.

KNOCK, KNOCK

After the hack occurred, the exchange publicly stated that they would refund $425 million back to the 260,000 users who had been affected. This represented about 90% of the funds stolen, but getting back 90% is far, far better than getting nothing back at all.

The Financial Services Agency came out with a pretty light punishment for the exchange. Essentially, they were told to put in safeguards to ensure that such hacks would not happen in the future and to submit a written report about the hack by February 13th to the agency.

WHO’S THERE? FSA!

It seems that the FSA decided to be a little proactive, which makes sense in light of the magnitude of the hack. They raided the offices of Coincheck to ensure that the exchange has the necessary funds to make good on their promises of restitution, especially as the funds will be paid in yen and not virtual currencies.

Another reason for the regulatory raid is to see that the exchange has put the necessary security precautions in place, as well as to examine how the hack actually happened in the first place. Of course, one such reason for the success of the hack was that the exchange stored customer assets on a system that was connected to the internet 24/7.

This incident marks the very first regulatory raid by the Japanese government on a cryptocurrency exchange. As for the raid itself, Finance Minister Taro Aso says, “The investigation is being conducted to protect the current users.”

It makes sense for the Japanese authorities to make a show of force in investigating Coincheck and ensuring that clients would be protected. As China and other countries continue to clamp down on cryptocurrencies, Japan is reaping the benefits of the ongoing migration of crypto-related businesses. The country has put in legislation concerning cryptocurrency, such as the revised Payment Services Act, and even recognizes Bitcoin as a legitimate payment option.

Hopefully, the entire situation will be resolved in a satisfactory manner for everyone involved, even though Coincheck is going to have to eat the cost of the compensation.

http://bitcoinist.com/japanese-authorities-raid-hacked-coincheck-exchange/

[davis196]

It`s good that Coincheck will refund their customers.By the way,i`m tired of all the fake news in the media around this hack.I saw about 10 TV shows mentioning Coincheck,saying that this is a 500mln USD BITCOIN theft.What`s wrong with all the journalists?Can`t they make the difference between bitcoin and NEM coin?
The bad thing is that this hack will force the Japanese authorities to increase the regulations over exchange platforms.

[imyashir]

because maybe this news has dropped the price of bitcoin. coincheck is known in japan as a legit exchanger but that's just a return to the raid is true or just a fudd news for investors to be afraid. Poor newbie buy bitcoin at high prices and large groups waiting for bitcoin's cheap price is very good because they can manipulate a crypto. For me it's not just bitcoin the profitable eplore the other altcoin.

[Kemarit]

I don't get it, why do they need to raid Coincheck? Can the Japanese authorities just ask them to open their books for them and see if  they really have adequate fund? Coincheck has been cooperative as far as I know and even says that they are willing to refund its customer based. So it doesn't really make sense to me. I know government wants to ensure that users will and can be paid, but from the way media portrays it, for me its not a raid per se, but probably Financial Services Agency has just to Coincheck in unannounced. The media has really turning into another massive ploy to discredit crypto and put it into bad light.

[1Referee]

Perfect! I like the swift reaction of the FSA in this matter, because this exchange definitely has some explaining to do, and especially because of the fact that there was half a billion worth of funds (just from one single coin) in hot wallet storage. I seriously hope that if this exchange turns out to be robbed from inside, which is quite a likely scenario, that the people operating that exchange will suffer badly. It's too easy to blame hackers for something that has been planned and executed from inside.

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i`m tired of all the fake news in the media around this hack.I saw about 10 TV shows mentioning Coincheck,saying that this is a 500mln USD BITCOIN theft.What`s wrong with all the journalists?Can`t they make the difference between bitcoin and NEM coin?

People don't know NEM, so the media has to use something with more potential impact, which is Bitcoin.

The bad thing is that this hack will force the Japanese authorities to increase the regulations over exchange platforms.

It's actually good. Exchanges by law should be prohibited from having that much in capital sitting in hot wallets, because it only leads to problems as the past has taught us. If this leads to stricter exchange regulations, then I am happy to see it happen, because these hacks aren't anything new (i.e a cycle that needs to stop), and they might scare off potential investors, so something has to be done.

[veleten]

I don't get it, why do they need to raid Coincheck? Can the Japanese authorities just ask them to open their books for them and see if  they really have adequate fund? Coincheck has been cooperative as far as I know and even says that they are willing to refund its customer based. So it doesn't really make sense to me. I know government wants to ensure that users will and can be paid, but from the way media portrays it, for me its not a raid per se, but probably Financial Services Agency has just to Coincheck in unannounced. The media has really turning into another massive ploy to discredit crypto and put it into bad light.

maybe its a part of the global "coincedence" all the news and events suddenly are so terrible for crypta
and the market is crashing,simultaneously,every single piece of news is either neutral or negative,compared to the end of the year
when almost every media event was positive and full of hope,if this is not manipulation of the market then I don't even know...
as for the FSA raid I think they recieved info and suspected some foul play involving the exchange staff
530 mil is nothing to be sniffed at and many could have been swayed by the easy money and then blame the mysterious hackers never to be found

[MMostaza]

What are your thoughts guys about this new step that Coincheck is taking? It seems they are going to stop dealing with Monero, Dash and Zcash. Coincheck says that there is a risk with cryptocoins which has high levels of anonymity and that maybe half of the NEM stolen in the hack may have been converted on the darknet:

https://www.altcoinss.com/news/news-coincheck-drops-anonymous-monero-dash-zcash?uid=10006

I believe that they are putting lot of effort and trying very hard to restore the big damage that they suffered.