Coincheck begins payments to victims of hacking, the background activity of Japanese regulators

Recently, the Japanese regulator has taken some stringent actions to address seven of the cryptocurrency exchanges, requiring two of them to cease operations for a month.

March 8, Japanese financial services Agency (FSA) lashed out at the exchange due to their inability to ensure proper operation of the internal control systems. All areas were ordered to intensify efforts to ensure security and prevention of money laundering.

Operations FSHO and Bit Station has been suspended since March 8. The FSA said that the exchange FSHO does not control the trade properly and her staff has no proper training. FSA also argues that one of the senior staff Bit client Station used bitcoins for personal purposes.

The FSA also fined exchanges such as the GMO Coin, Tech Bureau, Mister Exchange, Increments and Coincheck. Coincheck receives second order from the time of the burglary and theft of funds at the beginning of this year, when it was stolen coins NEM (XEM) at a cost of $530 million.

Monday, March 12, Coincheck has announced that it is beginning to pay compensation to those whose assets were stolen during the burglary. In addition, the exchange opened withdrawal and started trading in some currencies, including bitcoin, and ETH, ETC, XRP, LTC and BCH.

Coincheck problem was that she kept all of his NEM in a hot wallet connected to the Internet. For comparison, the us Coinbase keeps 98% of their funds in a safe cold wallet. Vice-President of the NEM Foundation Jeff MacDonald in an interview with Bitcoin Magazine said that the theft could have been avoided if Coincheck used purses multipoles.

Hacking Coincheck has become one of the biggest heists in the cryptocurrency world after the attack on Mt. Gox, the Tokyo stock exchange, robbed by hackers in 2014. What happened with Coincheck has forced a new look at the risks of holding the funds in a cryptocurrency sites, and since then the FSA has taken strong measures to protect Japanese nationals and security exchanges throughout the country.

Last year Japan became one of the first countries that regulate cryptocurrency exchanges by creating a licensing system. Now the country was 16 exchanges and 16 others, including Coincheck got the opportunity to continue without registration until the application process for licenses. Five of the seven exchanges, fined FSA, not yet registered. After the suspension of operations Bit Station withdrew the application.

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