Coincheck Exchange Loses Two-Thirds of Its Revenue In Q3 2018 After Hacking Attack
The Japanese crypto exchange Coincheck, which was hacked and lost $520 million USD back in January 2018, has reported that it has lost most of its revenue in 2018. After Monex Group, which is the Japanese brokerage firm that has acquired Coincheck, released the financial results for the third quarter of the year, it was revealed how much money was lost.
Coincheck saw a decrease of 66 percent in its revenue during the quarter, the reports released today, October 29, affirm. At the moment, according to Oki Matsumoto, the CEO of Monex, the group is still awaiting the license from the regulator, which has impacted the activities of the company.
The revenue that the company made was only $2.8 million USD in this quarter, which is far less than it was three months ago, $8.4 million USD. While the company complains about the Japanese regulation, the main problem, they believe, is with the hacking still, which led the company to lose a lot of money even afterward.
After the hacking, the services were suspended to new users and only older users were still able to see their cryptos, which has also affected the services being offered by the exchange for its customers. This is the main reason why the company’s revenue has plummeted, as it could attract new clients until waiting some time and even now people are wary of using it.
However, at the moment the exchange reports that most of its users are new. It was reported that the company was successful to cut the costs of operating the exchange, however, they were not enough as the revenues went down so fast.
Since buying the exchange, the group has reported losses of about $7.5 million USD, which means that maybe buying it was not such a hot idea after all. According to CoinMarketCap’s data, the exchange had a volume of only $4 million USD in trading in the last 24 hours.
At the moment, Monex Group has 1,025 employees and 15 percent of them are focused on working in the exchange. Coincheck has 1.7 million users and it is currently working to make its structure more resilient against hacking. This includes anti-money laundering enhancements and counter-terrorism financing measures, as well as a defense system.
The Hacking Case
Back in January, Coincheck was hacked and the hackers were able to steal $520 million USD worth in cryptos, mostly NEM tokens. This has led the company to be sold to Monex Group for $33.5 million USD.
After the attack, Japan started to be more severe with the exchanges from the country as this was one of the most high profile attacks after the bull run of Bitcoin that made cryptos mainstream.