Tokyo raids virtual currency exchanges

TOKYO/HONG KONG: Japan said yesterday it had carried out raids on a number of cryptocurrency exchanges following a massive hack that saw thieves steal US$530 million (RM2.09 billion) in virtual currency.

The hack of Coincheck was one of the largest of its kind, and prompted authorities to search the firm’s offices last week, after slapping it with an administrative order.

Finance Minister Taro Aso said yesterday those raids were now being expanded.

“We have started to raid several virtual currency exchanges,” he said, adding that the raids were intended to “examine their internal governance structure”.

Aso, also the minister in charge of financial services, has admitted that the government “needs to strengthen our supervision” of virtual currency exchanges.

Japanese officials have suggested Coincheck lacked proper security measures, making itself vulnerable to theft.

In the wake of the theft, the country’s Financial Services Agency instructed more than a dozen local exchanges to submit reports on their efforts to monitor systemic risks.

Coincheck is also aiming to lift curbs on yen withdrawals next week, media reported, though sources said regulators had not yet okayed such a move.

Coincheck had secured the safety of its systems and was seeking to allow customers to resume yen withdrawals from Tuesday, said national broadcaster NHK yesterday, citing unnamed sources.

Meanwhile, Hong Kong regulator Securities and Futures Commission (SFC) said yesterday it would crack down on cryptocurrency exchanges that operate in the Asian financial hub without a licence or violate local securities laws.

The SFC said it had received investor complaints they were unable to withdraw cryptocurrencies from their accounts with some exchanges, and that they had suffered significant losses due to “technical breakdowns” of the platforms.

... the raids were intended to examine their internal governance structured. TARO ASO

Japan Finance Minister