Coincheck files hacking report with regulators

JAPANESE cryptocurrency exchange Coincheck, under pressure to better safeguard investors after the daring theft of $530 million (R6.33 billion) of digital money last month, said it had yesterday filed a report with regulators on the hacking.

The Financial Services Agency ordered Coincheck to raise its standards after the late-January hack, directing it to submit a report on the security of its systems and measures it would take to prevent a repeat.

The report included Coincheck’s investigation into the heist and details of steps to bolster its risk management system, the exchange said.

The submission of the report came as Coincheck lifted curbs on yen withdrawals.

The exchange, which froze all withdrawals of yen and cryptocurrencies following the heist, said last week it had confirmed the integrity of its system security and would from yesterday allow customers to withdraw yen. A source said on Friday that Coincheck had received withdrawal requests from customers totalling about ¥30 billion (R3.3bn).

The exchange will hold a press conference at 8pm local time, the person familiar with the matter said. Coincheck did not immediately respond to an e-mailed request for comment.

The heist has exposed flaws in Japan’s system of regulating cryptocurrency trading, and raised questions over the country’s dash to oversee the industry – a move that was in sharp contrast to clampdowns by policymakers in countries such as South Korea, China and India.

Despite allowing customers to resume withdrawing yen from its systems, Coincheck said last week it would keep in place curbs on cryptocurrency withdrawals until it could guarantee the secure resumption of its operations.

A lawyer representing a group of 10 cryptocurrency traders said that they would launch a lawsuit against Coincheck tomorrow over the curbs on taking out cryptocurrencies.