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Japan: Coincheck to be fully licensed by end of year

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Japan’s Financial Services Agency has decided to approve Coincheck’s cryptocurrency exchange license, Nikkei has learned.

An announcement will come by the end of the year, closing a tumultuous chapter in Coicheck’s history that began back in January when 58 billion yen ($511 million) worth of clients’ cryptocurrency holdings was stolen.

At the time of the hack, Coincheck was Japan’s largest cryptocurrency exchange. The theft forced Coincheck to halt trading, leaving its clients with no sell option as the market went into a long tailspin.

 

The FSA judged that the company improved customer protection and other systems after being purchased by online brokerage Monex Group in April.

A year earlier, in April 2017, Japan revised its payment services law to guard clients and prevent money laundering. Included in the revision was a licensing system for cryptocurrency exchanges. Coincheck had already been operating at that time and was allowed to continue doing business on a provisional basis as it awaited a decision on its license.

After Coincheck was hacked, the FSA twice ordered the exchange to improve its business operations; the agency found it was unprepared in regard to customer protection and money laundering.

Now a subsidiary of Monex Group, Coincheck has taken measures to revise how it selects what cryptocurrencies it will handle. After considering the cryptocurrency market’s fall, Coincheck compensated its clients to the tune of 46 billion yen.

The FSA’s decision to grant a license to Coincheck is expected to trigger the resumption of the agency’s approval process. Nearly 200 companies are said to be waiting for licenses.

In deciding whether to grant licenses, the FSA will scrutinize business plans, anti-hacking measures and the effectiveness of shields put up against other misconduct.

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