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Coincheck Gets Hit With Another Lawsuit Over Frozen Assets

Japanese crypto exchange Coincheck, which became the victim of hackers in January, resulting in major losses, has reportedly been hit with another lawsuit from disgruntled traders.

A report from Japanese news outlet Sankei writes that an extra 132 investors joined a lawsuit against the digital currency exchange on the 27th February. The traders are seeking a refund of 228 million yen ($2.1 million) in cryptocurrency.

This latest lawsuit against Coincheck puts it back into the limelight following the major hack at the end of January. Targeting the exchange hackers were able to siphon off $530 million worth of XEM, the native token for the NEM platform, making it the biggest theft of its kind.

As a result, the exchange froze services on all accounts leaving thousands of customers unable to withdraw their money. Despite, Coincheck vowing to reimburse 260,000 of its customers and restarting yen withdrawals, which saw 40.1 billion yen ($373 million) being withdrawn – this hasn’t done much to stem anger from its users.

Consequently, last month it was reported that a group of seven traders had filed a lawsuit against the exchange for freezing asset withdrawals. According to Japan Today, the investors are seeking the reimbursement of 19.5 million yen ($183,000). It was also reported at the time that a second lawsuit was expected to be filed on the 27th February.

Following the hack at Coincheck, Japan’s financial watchdog, the Financial Services Agency (FSA) conducted onsite inspections of the exchange after handing it an improvement order. Coincheck has since submitted a report to the FSA explaining how the hack happened and measures to prevent future attacks. Prior to the hack Coincheck was operating without a license; however, the FSA now has to determine whether to grant a license to the exchange for it to continue operating.

Since the hack questions have been raised over Japan’s eagerness to embrace crypto exchanges and whether more robust measures need to be put into place to ensure hacks don’t take place again.


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Author: Currency

Updated: March 1, 2018 — 2:36 pm

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