Coincheck Perseveres Through Exchange Hack to Finally Be Approved for Crypto License in Japan
Last year, Coincheck was the home of a massive hack that stole $530 million. The company has struggled to regain their security stance in order to gain the registration that they need to operate within Japan. Now, since Coincheck was acquired for $33.5 million by Monex Group, they have finally been registered with a crypto exchange license.
The annoucement of the registration came directly from Monex Group, who said that the exchange falls under the Payment Service Act and is registered with the Kanto Financial Bureau. The approval came from Japan’s Financial Services Agency (FSA), though they had to agree on improving risk management and government systems, keeping “concrete internal controls and customer protection in mind.”
After the hack last year, the FSA had required Coincheck to make some changes in the way that their security systems protect the platform. The platform had to then send in a business management plans to show how they intended to improve upon the system, though they were not registered yet.
In an official press release, Coincheck said, “Coincheck has given a full explanation to the agency on the firm’s business descriptions, plans, and basic philosophy on risk management, as well as on the development of the firm’s governance with concrete internal controls and customer protection in mind.”
For several months, Coincheck was unable to operate, but they’ve been gradually bringing their operations back. Thought it took until November 2018, they had officially reinstated crypto services for all digital assets.
Now that they have the license, Coincheck is a part of the many different crypto exchanges that Japan hosts, like SBI Holdings. Coinbase is hoping to become licensed this year as well. Still, Coincheck knows that the work is not offer. The press release continued,
“With the registration as a cryptocurrency exchange agency serving as a milestone, Coincheck strives to continue offering reliable services for our current and prospective customers in a safe and stable manner. Coincheck is also committed to further strengthening security and enhancing usability.”
Any crypto exchange that operates within Japan’s borders has to include both anti-money laundering (AML) and know your customer (KYC) protocols, which has been required since April 2017. This was when the Payment Service Act went into place, and officially determined that Bitcoin would be a legal method of payment.
The FSA announced in September that they were increasing their staff to keep up with the incoming license applications. Presently, there are over 160 firms that are looking to apply for such a license.