Hacked Exchange Coincheck Drops Three Anonymity-Focused Coins After FSA Inspection

Hacked Exchange Coincheck Drops Three Anonymity-Focused Coins After FSA Inspection
Coincheck, which suffered an over $500 mln hack of NEM in January, will stop handling three anonymous coins.

Japanese crypto exchange Coincheck will stop handling anonymity-centered cryptocurrencies Monero, Dash, and ZCash in the aftermath of the major January hack when $534 mln worth of NEM was stolen from the exchange, Cointelegraph Japan reported today, March 17.

The three anonymous currencies will reportedly be bought by Coincheck from customers at a fixed price. The Japan Times added that Coincheck is also considering accepting transfers of the currencies from verified Coincheck accounts.

Coincheck froze trading and withdrawals of all cryptocurrencies after the NEM was stolen, but the exchange resumed activities of certain currencies on March 12. The exchange has already refunded 260,000 affected customers over $440 mln from its own funds, the Japan Times reports.

Additionally, about half of the NEM stolen in the hack has allegedly been converted into different cryptocurrencies for money laundering use, a cybersecurity expert told the Japan Times. The NEM Foundation had reported that the stolen NEM began being moved to different wallet addresses on Jan. 30.

According to the Japan Times, hackers then began converting the NEM on Feb. 7 on a site created on the darknet. Some of the NEM stolen from Coincheck has reportedly been found at a crypto exchange in Canada, as well as at the Japanese NEM exchange Zaif.

Coincheck, which is still awaiting registration as a crypto exchange from the Japanese Financial Services Agency (FSA), was served a business improvement notice on March 8 after it was part of a series of FSA inspections that included 15 other unregistered Japanese crypto exchanges. The notice specifically cited as Coincheck as lacking a system for preventing money laundering and the financing of terrorism.

The Japan Times pointed out that Coinchecks decision to stop handling the three cryptocurrencies Monero, Dash, and ZCash is most likely a response to the FSAs improvement notice. Owners of said anonymous cryptocurrencies cannot be traced on the Blockchain, making them arguably easier to use for money laundering.

17.03.2018 / 13:14 50
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