Japan’s FSA Probes if Coincheck Can Pay the Stolen Funds

Japan’s Financial Services Agency probes exchange site Coincheck to find out if it can really fulfill its promise of paying its users who lost NEM coins.

Photo for the Article - Japan's FSA Probes if Coincheck Can Pay the Stolen Funds

A day after the hacking incident that resulted in more than $500 million worth of XEM coins lost, Coincheck stated on January 27, 2018 that it will pay $442 million to users affected by the hack. The question now is if the company capable of paying the said amount.

Photo for the Article - Japan's FSA Probes if Coincheck Can Pay the Stolen Funds

Coincheck XEM Hacking

These 500 million XEM is from 260,00 users of the virtual currency exchange site. On January 27, 2018, the company pledged that it will compensate the users for 88.549 JPY per token, a total amount of around 46 Billion Yen ($422 million).

The FSA Checks In

Japan’s Financial Services Agency inspectors visited Coincheck’s office in Tokyo in the morning of February 2, 2018. This is in accordance with the country’s Revised Payment Services Act that allows FSA to check whether the company has appropriate funds to pay back the lost XEM tokens to customers.

This is to also probe the current security measures of Coincheck.

“The investigation is being conducted to protect the current users,” – Finance Minister Taro Aso

Aside from the statement, Mr. Taro Aso also ordered other exchanges to report their risk management procedures. This is to give customers the “appropriate” treatment.

FSA Investigation

The Japanese FSA is there to see if the company has enough finances to fulfill its pledge, check for adequate security measures to prevent another attack, and to determine how the hacking incident happened.

Coincheck was also ordered to submit a written report to the regulators by February 13. Because of the incident’s high profile nature, the government regulator decided to step in and make rounds before the report’s submission.

Coincheck and Japan

Coincheck is notably absent in the list of virtual currency exchanges approved by the Japanese government to have a license. However, it is allowed to continue operating until laws are in place that govern cryptocurrency in the country.

Japan is the largest cryptocurrency market in the world.

Source: Asia Nikkei

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