Coincheck Inc. a cryptocurrency exchange based in Japan, is under intense pressure to come up with ways to ensure the safety of digital money of investors in the cryptocurrency trade. This directive from the Financial Services Agency has come after a $530 million digital money theft that occurred from the exchange last month.
The agency requires the exchange to provide a report on how secure its systems are, and the measures it has taken to prevent another hacking from occurring. The exchange has put restrictions on the withdrawal of yen and other cryptocurrencies after the theft.
Effect on Investors
However, last week Coincheck confirmed that its system was secure and allowed its investors to withdraw their yen. Customers are not impressed as the exchange has more than $280 million or 30 billion yen pending withdrawal. Additionally, a group of ten cryptocurrency traders has launched a lawsuit against the exchange on restrictions put in place for the withdrawal of the yen by the exchange. However, the exchange is trying to reassure its customers and regain their trust promising that it has put measures in place to ensure safe withdrawals and the security of its operations.
Strict Regulations in Other Countries
This recent hack does not favor Japan’s plans to regulate the cryptocurrency industry as it is obvious that the system in the country has flaws. Policy makers in other popular crypto trading nations have put strict regulations in place to safeguard investors.
In India, for instance, the government is set to decide on clear regulations to regulate the trade. The responsibilities of the different regulators are already set up, and the government is in the process of finalizing a comprehensive policy on cryptocurrencies. Rumor had it that the country was set for an imminent ban on the trade. However, representatives of the crypto community in India quashed these fears, assuring the traders that trading was still allowed, albeit under strict regulations.
China, on the other hand, is set to increase its regulations on the ban of Initial Coin Offerings (ICOs) and exchanges. These measures will allow the government to monitor cryptocurrency accounts and the flow of foreign currency to overseas ICOs. Experts point out that these steps are plans to effectively end cryptocurrency trading in the country.
Another country that has not been left behind in coming up with crypto trading regulations is South Korea. After the United States and Japan, South Korea is the third world largest cryptocurrency market in the world. This is despite the country population being small. Recently, the South Korean government banned the use of anonymous bank accounts in the trading of cryptocurrencies. The move was to protect the investors and to ensure virtual coins are not being used in illegal activities such as money laundering. This was amid speculation of an outright ban on cryptocurrency trading in the country.
What This Means for Other Legal Tenders
Haruhiko Kuroda, the Central Bank of Japan (BOJ) Governor assured the public that developments in cryptocurrencies are not likely to affect legal tenders, as they are often used for speculative trading. He added that they have no assets to back up their value and are not used as legal tender. The governor added that Central Bank of Japan was watching crypto trade development and would make sure that the public trust on the settlement system that BOJ is in charge of would remain intact.
What do you think about the recent hacking of Coincheck? How do you think it will affect cryptocurrency trading in Japan? Leave us your views in the comments section below.