Hacked Japanese Exchange Considers Capital Tie-Up to Regain Public Trust

Japanese cryptocurrency exchange Coincheck is reportedly considering a capital tie-up in order to regain the trust of crypto investors, following a recent hack where 58 billion yen worth of cryptocurrency was lost. As multiple victim groups are preparing to sue the exchange, the Tokyo police is also stepping up its investigations.

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Possible Capital Tie-Up

The Tokyo-based cryptocurrency exchange Coincheck is reportedly “considering a capital tie-up to strengthen its financial base and regain trust following a massive cryptocurrency theft from the exchange in a hacking incident about a month ago,” Jiji Press reported, citing an informed source. The exchange lost 58 billion yen worth of the cryptocurrency NEM (~USD$544 million) on January 26.

The source told the publication:

There have emerged several possible partners, including an investment fund.

Coincheck CEO talking to the press.

An official in the crypto industry commented, “Coincheck’s customer base of over one million is fascinating.” However, there are concerns that the exchange could lose its customers going forward as it still struggles to compensate victims. “Investing in the company could involve great risks,” an official at a financial institution elaborated.

Jiji Press reported on Monday that “Coincheck expressed its eagerness to continue its business,” adding that “the company will strengthen its computer security system and information disclosure policy.”

Three Victim Groups

It has been about a month since the hack and the prospect of Coincheck compensating roughly 260,000 customers and restarting its business are still uncertain, Sankei reported. While the exchange resumed yen withdrawals on February 13, crypto withdrawals have not resumed. In addition, Coincheck promised to repay customers approximately 46 million in yen, rather than in cryptocurrencies.

Coincheck’s executives explaining about the hack.

On February 15, seven Coincheck customers filed a lawsuit at the Tokyo district court seeking the return of their cryptocurrencies, rather than Japanese yen. The plaintiffs are requesting their NEM and 12 other kinds of cryptocurrency, including bitcoin and ether, Business Insider Japan reported.

Another victim group was formed on February 22, and the third is also scheduled to be established, the news outlet added.

Earlier this month, a meeting of Coincheck victims was held in Tokyo; approximately 35 users attended as well as three lawyers from the law firm Authense. An association of Coincheck’s victims was also established at the meeting.

Meanwhile, Nikkei reported that the Tokyo police department of cybercrime is setting up a headquarters this week to investigate the hack. It will be staffed with 100 investigators, including those familiar with cryptocurrency technology.

Do you think Coincheck should partner with another company? Let us know in the comments section below.

Images courtesy of Shutterstock and Coincheck.

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