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Investors withdraw $373 million from Coincheck

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Report by Coincheck

TOKYO – The Financial Services Agency had directed Coincheck, the Japenese cryptocurrency exchange to amp up security standards. It was also asked to submit a report on its systems at the time of the biggest-ever digital currency heist.

This theft has exposed loopholes in the Japanese regulation of crypto trading, and has raised concerns across globe. It has seen clampdowns on trade in countries like South Korea, China and India.

Customers were able to withdraw 40.1 billion yen after the ban on withdrawals lifted on Tuesday. The exchange will be able to meet withdrawal requirements in future, says Otsuka. However, he declined to offer any clarification as to the total amount locked in the exchange.

Coincheck assures repayment of the 40.6 billion yen lost in the heist, but declined to specify the timeline of the repayments. It has also declined to comment on whether FSA has verified availability of sufficient funds to initiate the repayments.

Lawsuit

While Coincheck resumed yen withdrawals, there would still be curbs on cryptocurrency withdrawals, says Otsuka. An external security company is evaluating and placing checks to secure the systems.

A lawyer representing 10 cryptocurrency traders is set to file a lawsuit against Coincheck in Tokyo District Court against the restrictions on withdrawing cryptocurrency. They demand a provision to withdraw cryptocurrency into private wallets outside exchange.

Meanwhile, Bank of Japan Governor sees no reason to fret. According to him cryptocurrencies pose no threat to legal tender as they are used mainly for speculative gains only. However, he added that BOJ is closely following developments to ensure that public trust in settlement systems operated by the Central Bank is not eroded.

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