- Coincheck has been granted a cryptocurrency exchange license by the FSA in Japan
- This comes a year after a hack that cost the exchange $530 million
On the 11th of January 2019, it was announced that Coincheck has been granted a cryptocurrency exchange license by the Financial Services Agency (FSA) in Japan. The registration of the firm took place with the Kanto Financial Bureau.
This comes a year after Coincheck experienced a hack that led to the loss of about $530 million. The firm was, at the time, awaiting a license approval.
Coincheck joins a number of other firms that have received their license to practice in Japan in recent times.
One of the requirements for getting an exchange license was proof of the exchanges’ internal control that ensures that customer funds are safe. Considering the magnitude of the loss experienced a year ago, this is to be expected.
According to the statement, however, Coincheck fulfilled this requirement.
“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,” it says.
There was also the need to overhaul their business model as well as bring in new board members. In an effort it achieves this, Coincheck accepted a takeover bid from Monex, a Japanese online brokerage firm which paid $33.5 million.
That wasn’t all as the management at Coincheck also saw an overhaul. Yusuke Otsuka and Koichiro Wada, the then COO and CEO, stepped down and were replaced by Monero-approved individuals.
Also peculiar is the delisting of various privacy coins such as Dash, ZCash and Monero. This is because the firm felt that having such coins on their platform might hinder the exchange from complying with anti-money laundering laws.
Augur, a prediction marketing protocol, was also delisted to avoid connections to online gambling.
The Problem With Privacy Coins
Privacy coins have been rather controversial in the last few years and the need for Coincheck to Distance themselves from privacy coins is very telling.
Unlike coins like Bitcoin, their transaction history is hidden and thus, they are untraceable.
This might be an advantage for coin users who want privacy, but they can also be used for malicious means.
An example of this is the recent kidnapping of a Norwegian billionaire’s Wife in which the ransom was demanded in Monero, a privacy coin, to avoid any possible detection.