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Victim of the Biggest Hack, Coincheck Tries to Regain Trust

Victim of the Biggest Hack, Coincheck Tries to Regain Trust 101
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Japanese cryptocurrency platform Coincheck has taken another step towards repairing its reputation – devastated in January by the biggest exchange hack in history.

The exchange, which was taken over by the Monex Group in April this year, has decided to beef up its security system with a two-step authentication system.

Coincheck issued a notice to all customers stating that all logins will now need to be made via Google Authenticator and SMS (text message) authentication – as part of updates that will be made applicable to web logins and app users. The changes will be enforced via a new update, which will be compulsory to all users as of September 3.

The exchange has been hoping to rebuild consumer confidence and restore its reputation with the regulatory Financial Services Agency by bolstering its security network, as well as cooperating with self-imposed bans on “anonymous” tokens and limiting margin trading.

Coincheck also yesterday resumed trading in the Lisk (LSK) cryptocurrency, per a company tweet, two days after suspending LSK transactions due to the launch of the Lisk mainnet. LSK developers have claimed the launch was a success, and a number of other Japanese exchanges – including market leader bitFlyer – also took to Twitter to announce they were resuming LSK withdrawals and deposits on August 30.

Meanwhile, Monex Group, the new owner Coincheck, said in May that it also plans to expand its operations to the United States.

"We can broaden our customer base at Coincheck. In the end, we should and we can replicate the profitability [the previous owners] achieved before," Monex CEO Oki Matsumoto said.

For the 12-month period through March 2017 Coincheck generated JPY 980 million (USD 8.8 million) in revenue and JPY 471 million in net income from its core business. Also, the company made JPY 76.3 billion from the sale of investments in cryptocurrencies.

Monex has acquired Coincheck for a total of 3.6 billion yen (USD 32 million). The buyer has also agreed to split profits with former shareholders for the next three years. Founding president Koichiro Wada, who owned a 45% stake in the company, and chief operating officer Yusuke Otsuka (5.5% of the shares), as well as the rest of Coincheck’s management, step down as part of the deal.

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