Last week’s big news was how Coincheck got hacked. With hundreds of millions in funds lost, things are not looking great. The company will refund all users by using money from their own reserves, though. Moreover, the exchange now faces additional scrutiny in Japan as well. The local financial regulator ordered the company to get its act together. A very strong warning not to be taken lightly.
To put this into perspective, Coincheck being hacked is a very real problem. Cryptocurrency exchanges have a history of such unfortunate events. It also highlights vulnerabilities found in centralized trading platforms first and foremost. Japan’s Financial Services Agency ordered Coincheck to step up their game sooner rather than later. It is a decision which makes a lot of sense. The company shows their goodwill by refunding victims with Coincheck’s own funds. How this will be done exactly, remains to be determined at this point in time.
Coincheck Needs to Step up its Game
Cryptocurrencies are considered to be a legal form of money in Japan. As such, all cryptocurrency exchanges need to register with the government. Coincheck is one of the few companies able to bypass this requirement due to their long-standing reputation in the industry. This is why the FSA is a bit more lenient when it comes to this particular exchange. That doesn’t mean Coincheck can leave things go unpunished, though. They will need to come up with a solution to prevent future incidents like this one.
It’s worth noting the Coincheck hack has gone down a bit differently than people would expect. More specifically, none of the stolen money has been sold or sent to other wallets. Unfortunately, the exchange is unable to reclaim the money directly, which poses a big problem. It is evident this situation needs to be resolved sooner rather later. For now, it remains to be seen what the future holds for Coincheck in this regard. Criminals will not stop targeting cryptocurrency exchanges anytime soon.
For now, the question remains how the exchange will handle this problem. While they will repay customers, preventing this type of hack from happening again will not be easy whatsoever. Cryptocurrency exchanges are a prone target for criminals of all kinds. This is also the second time in history one of the biggest Japanese exchanges gets hacked. For Coincheck, stepping up their game is of the utmost importance right now. Protecting consumer assets and securing the platform are the top priorities moving forward.