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Biggest cryptocurrency heists in Japan push regulation talks amongst governments

Jan 29, 2018 Posted /  3802 Views

Biggest cryptocurrency heists in Japan push regulation talks amongst governments

On Friday morning Tokyo witnessed one of the largest cryptocurrency heists in the history when nearly $500 mln were hacked. Three days after the Japanese exchange Coincheck Inc. is still in shock and contemplating how to fight with it, while the digital currency market is echoing with the blow amongst the talks of regulations.

When the coin check executives arranged the press conference detailing about the episode which took place, everybody seemed alarmed as many governments are already in the process to regulate the digital assets market. Nonetheless, Japanese policymakers had started a new licensing system for the venues some months back and South Korean drama had already affected the market a lot with its threat of cryptocurrency exchange ban.

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However, Coinckeck has assured its customers in the weekend that they would partially reimburse the while bitcoin and its cousins are recovering from their selloff. Whatever be the case the regulators are depicting their concerns over the security lapses and saying that they are likely to persist.

David Moskowitz, co-founder of Indorse Pte in Singapore, which administers a social network for blockchain enthusiasts commented on the news-

“The latest theft will have two immediate effects: more regulation by authorities over exchanges and more recognition of the advantages offered by decentralized ways of trading,”  

It is noteworthy that Japan since some time had a favourable stance towards cryptocurrencies and blockchain technologies and is right now working with the associated ministries to find the cause of the hack in Coincheck system. Yoshihide Suga, the Chief Cabinet Secretary told the media that the government will take all needed actions and Coincheck will receive a business improvement order.

The Tokoyo based firms have witnessed a theft before too and Coincheck on Friday was added to a long list of heists at cryptocurrency exchanges and wallets, starting back from the hack of Tokyo-based Mt. Gox in 2014. The prices of cryptocurrencies have surged in some years, thus making the platforms become the lucrative targets for hackers.

From some time now the regulators around the world are vocalizing their lack of faith on cryptocurrency exchanges which has spurred the interest of institutional investors. Though after CME Group Inc. and Cboe Global Markets Inc. introduced Bitcoin futures in the U.S. last month the interest has dipped.

“Such large-scale hacks are some of the biggest risks faced today by the global crypto community,” commented Henri Arslanian, fintech and regtech lead at PwC in Hong Kong.

According to a statement posted on Coincheck's website, Sunday mentioned that the company which is regarded as one of Japan’s biggest cryptocurrency exchanges will utilize its private resources to reimburse customers who dissipated money in the hack. The exchange whose shareholders include 27-year-old Chief Executive Officer Koichiro Wada, Chief Operating Officer Yusuke Otsuka and two investment firms have remarked that they are in touch with Japan’s Financial Services Authority and the Tokyo Metropolitan Police.

Nonetheless, how much the company and the enthusiasts try to balance off this theft, this hack will reasonably to push policymakers to enforce austerer security conditions at cryptocurrency exchanges, says David Shin, a founding member of the Bitcoin Association of Hong Kong and president of the Singapore-based Asia Fintech Society to Bloomberg media.

“A lot of regulators don’t know yet how to regulate this area,’’ Shin said. “This episode will definitely get their attention.’’

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