Morning News: Coincheck to Be Sued, Farmers Found Mining Crypto

Hack Japan Mining Regulation Scam South Korea

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 25, 2023

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Coincheck to Be Sued, Submits Improvement Report to Regulator Energy Provider Discovers 38 Illegal Crypto Mines Online Gift Certificate Crypto Fraudster Caught Japan’s FSA Tells Macau-based Exchange to Back Off

Catch up on the most essential cryptocurrency and blockchain news stories breaking in Asia and the Americas while the rest of the world was asleep.

Coincheck to Be Sued, Submits Improvement Report to Regulator
Japanese cryptocurrency exchange platform Coincheck has handed over a four-point business improvement report to the country’s regulatory board, the Financial Services Agency. The platform suffered a USD 400 million hack last month. The report outlines details of how the hack took place, explains what kind of support will be offered to the exchange’s customers and what Coincheck plans to do in order to prevent further security breaches – with plans to bolster existing security systems and to implement new anti-hacking measures. In a statement, Coincheck said it would be making “meaningful, tangible improvements” to its services and platform and held a press conference to address investor concern. However, a lawyer representing a group of 10 claimants who are taking Coincheck to court, took to Twitter to bemoan, “There was almost nothing new said at the press conference that adds to what had already appeared in the Coincheck statement.” Coincheck began offering yen withdrawals for the first time since the hack on Tuesday and was inundated with requests. Per the Japan Times, “A source with knowledge of the matter said such requests amount to around 30 billion yen (USD 279 million),” while Bloomberg claimed the total was closer to USD 373 million.

S Korean Energy Provider Discovers 38 Illegal Crypto Mines, Issues US$470,000 in Fines
South Korea’s Korea Electric Power Corporation (KEPCO) has unearthed evidence that 38 rural farming and fishing warehouses have been operating illicit cryptocurrency mines using subsidized power. Under South Korean law, KEPCO supplies farming and fishing businesses power at a lower, subsidized rate – providing they use electricity exclusively on agricultural processes. KEPCO investigated a total of 1,045 customers whose energy usage spiked to “suspiciously high” rates in December last year, and found that 38 facilities had violated KEPCO’s terms of use by running mining software on servers and other hardware installed at their premises. The majority of the offenders were located in South Gyeongsang Province, in the southeast of the country. Kim Jung-hoon, of the National Assembly’s Industrial Trade and Small- & Medium-sized Business Committee, said, “Illegal cryptocurrency mines reduce electricity sales revenue, compromise stability at electric power facilities, can cause accidents and damage consumer trust in subsidized energy provision.”

South Korean Online Gift Certificate Crypto Fraudster Caught
South Korean cyber-police say they have tracked down a scam artist who stung 24 victims for a total of USD 32,200 in cryptocurrency. Police confirmed that a 20-year-old man had been charged with fraud after selling bogus gift certificates online at a 70% discount if customers sent him funds in the form of cryptocurrency transfers. The head of the Uijeongbu Cybercrime Investigation Unit told media network MBN that it was unlikely that the victims would ever see their money again. MBN also quotes Kwak Kwang-joo, of the Department of Psychology at Seoul National University, as saying, “Cryptocurrency-related frustrations are on the rise [in South Korea] because so many people had such high expectations for bitcoin and other currencies.”

Japan’s FSA Tells Macau-based Exchange to Back Off
Japan’s Financial Services Agency (FSA) issued a formal warning to Macau-based exchange platform Blockchain Laboratory on Tuesday, threatening criminal charges if the company does not decease from attempts to court Japanese cryptocurrency investors. Per Japanese law, the FSA can press charges against any company that offers exchange services without first receiving official approval. Even though Blockchain Laboratory is not based in Japan, the FSA has claimed that the exchange is subject to Japanese law as it has held several cryptocurrency seminars and ICO-related events in Japan and placed advertisements on Japanese websites. The FSA says it sent an inquiry to Blockchain Laboratory in December last year, but was not satisfied with the response it received.