Category Archives: Coincheck

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Markets: Could Monacoin Become Japan’s Own Litecoin

Japanese home-grown cryptocurrency Monacoin, tagged as being the country’s first digital currency, has rocketed more than 80% in just 24 hrs, gaining plenty of market attention.

With the equivalent of USD 140 million changing hands just on @bitbank_inc,  Japanese crypto traders are enthusiastic, particularly as this recent activity marks a second major spike in the cryptocurrency after a 40% leap last month.

Analysts believe that the surge in price is connected to the news that Monacoin will soon be trading on Japan’s Coincheck exchange although it is still not listed on some of the world’s major exchanges. If exchanges such Binance begin to take an interest, then it is thought this will further leverage the currency.

Buyers are always looking for an opportunity to find an altcoin which can deliver, particularly as the market is beginning to show signs of recovery. Coins like Bitcoin Cash, Litecoin, Monacoin, and others have the perception of being cheaper and, therefore, less risky, hence attracting plenty of attention when they start to move. Litecoin recorded an increase of 13% on Friday whereas Bitcoin recorded only a 1.5% increase on the same day.

With a 24-trade pump such as this, it is only a question of time before more Japanese traders take notice, which could eventually lead to a more widespread trading opportunity for Monacoin across more exchanges, following in the recent footsteps of Litecoin as it eclipsed Bitcoin.

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Coincheck Granted Exchange License a Year After Major Hack

Coincheck Granted Exchange License a Year After Major Hack

Japanese cryptocurrency exchange Coincheck has been granted an operating license a year from its notorious hack that resulted in a loss of USD 530 million.

Effective immediately as of 11 January 2019, Coincheck is now registered with the Kanto Financial Bureau. This will be its first time operating as a licensed cryptocurrency exchange.

In January 2018, Coincheck suffered a security breach which resulted in the theft of USD 530 million in New Economy Movement (NEM) tokens. The firm has said that it has since then adequately addressed any and all security concerns with the platform.

In order to receive the license, Coincheck was required to meet both Japan’s regulatory requirements and prove to the regulators that internal controls had been established to adequately protect investors on its platform. Coincheck claims it has established ”concrete internal controls” and a ”basic philosophy on risk management” to ensure another breach will not take place.

The management of the exchange has also been adjusted, with chief executive officer Koichiro Wada and chief operating officer Yusuke Otsuka both being replaced within the company. Privacy coins such as Dash and Monero were required to be delisted from the platform before it received its license, with the Japanese regulators citing that they failed to comply with anti-money laundering regulations.

Even with an official license granted, Coincheck will still have to win back its reputation to bring in new traders and re-establish itself as a secure platform.

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Japan Releases New Draft Crypto Regulations to Safeguard Investors

Japan Releases New Draft Crypto Regulations to Safeguard Investors

Japan’s Financial Services Agency (FSA) responsible for regulation has published a report outlining its proposals for changes to the current rules which govern cryptocurrency exchanges.

The main purpose of the updated rules is primarily aimed at addressing hacking incidents, self-regulation, deemed dealers, privacy coins, and margin trading. The framework, which also targets ICOs, was established after 11 meetings of the FSA study group.

Last month, FSA’s Study Group on Virtual Currency Exchange Industry concluded its tenth meeting. The group classified tokens according to three categories: virtual currencies with no issuers (like Bitcoin), virtual currencies with issuers, and virtual currencies that not only have issuers but also distribute profits.

According to the FSA, no major barriers prevent the new regulation becoming law and the heightened focus on cryptocurrency by the agency is thought to be a result of highly publicized hackings earlier in the year. The new laws are aimed at preventing such incidents by strengthening the management of customer property to safeguard investors.

New regulations will demand that exchanges have net assets “equal to or more than the amount equivalent to the currency and repayment funds” and also outline measures which cryptocurrency exchanges can employ to safeguard against bankruptcy.

Japan has been developing strict measures to safeguard the space since cryptocurrency began to gain huge popularity in the country. In October, industry self-regulators, the Japan Virtual Currency Exchange Association (JVCEA), were approved by the FSA to be officially recognized in its regulatory position.

Under the new regulations, Japan will refuse registration to those companies who neither “join the accredited association and conform to the self-regulation” nor establish self-regulation. There are currently “three deemed dealers” awaiting approval: Coincheck, Lastroots and Everybody’s Bitcoin.

Such companies are not permitted to advertise aggressively and expand their business while waiting for approval, nor are they able to acquire new customers during this period. Deemed dealers are also required to post their registration status on their websites to clarify their trading status for customers and potential clients.

The report also noted that ICOs “can be subject to the securities regulation” under the Financial Instruments and Exchange Act or the Fund Settlement Act.


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Coincheck Resumes Full Operations After Months of Post-Hack Suspension

One of Japan’s largest cryptocurrency exchanges, Coincheck, announced today in a press release that it has resumed its trading activities on assets Ripple (XRP) and Factom (FCT), thus making all assets on its platform fully available for trade.

It finally resumes full trading activities with the deposits and buying of these two assets after months of suspension following a hack in January that left the exchange vulnerable with NEM cryptocurrency deficits worth USD 530 million.

The hack exploited the exchange’s hot wallet which prompted a sequence of security upgrades and an eventual USD 34 million buyout by Monex Group two months later.

In the document, the exchange clarified that it had taken actions to protect its clients, stating, “Coincheck had suspended certain services in order to protect the integrity of customers’ assets and to investigate the cause of the breach to its system.” The exchange’s activities were gradually resumed alongside several security upgrade verifications.

Firstly, they resumed JPY withdrawal in February 2018 running through March and June of this year. Next, the exchange resumed new account opening on 30 October followed by deposits and purchasing of some cryptocurrencies including BTC, ETC, LTC, BCH. Then, ETH, XEM, and LSK trading activities were resumed on 12 November, the exchange is fully operational with all tradable assets now available on the exchange upon the resumption of XRP and FCT services.

The expectations of customers would be built upon the rehabilitated exchange under the new management which promises to provide a secure environment for customers and to grow sustainably as a socially valuable cryptocurrency exchanger.

Further, Monex will combine its expertise with that of Coincheck, leveraging on their experience in the financial industry and with the blockchain technology.


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Japanese Crypto Industry Granted Self Regulatory Status

Japan’s cryptocurrency industry self-regulators, the Japan Virtual Currency Exchange Association (JVCEA),  has been approved by the national Financial Services Agency (FSA) to be officially recognized in its regulatory position, effective immediately.

As reported by Bitcoin News in August, JVCEA applied for recognition from the FSA after establishing a 16 member strong team of licensed cryptocurrency exchanges and producing a nearly 1,000-page report on self-regulatory guidelines for crypto trading platforms to adhere to. Following the USD534 million heist that took place on the local Coincheck platform earlier this year, JVCEA is looking to prevent further incidents by imposing themselves as security inspectors.

Alongside monitoring security measures, JVCEA will handle other specific tasks such as evaluating the integrity of initial coin offerings (ICOs).

The FSA details in its terms of acceptance that the new regulators must issue each cryptocurrency exchange working guidelines, as well as elaborate on the anti-money laundering (AML policies). It must also enforce a set of rules that protect investors’ assets.

JVCEA has already published its key guidelines for cryptocurrency exchanges online, which have gone into full effect now the FSA has officially approved. Officially sanctioned insider bodies already exist in industries such as securities brokerages.

Speaking to Reuters anonymously, an FSA official said that self-regulation of the industry would be more efficient than the Japanese government, with industry leaders more equipped to deal with the fast-paced changes, adding ”It’s better for experts to make rules in a timely manner than bureaucrats do.”

Currently operating with 15 employees, the new watchdog plans to increase this to 20 by next month.

The FSA’s approval keeps Japan on track with some of the most progressive cryptocurrency regulations of any country. Last year it became the first nation to regulate cryptocurrency exchanges, requiring them to register with the FSA.

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Japanese Regulators Introduce New Crypto Exchange Screening Rules

Japan is to tighten some of its screening procedures for government approval for cryptocurrency exchanges.

A Japan Times report suggests that the Financial Services Agency (FSA) has “tightened its registration screening for cryptocurrency exchanges to see whether they are properly conducting risk management”, although the report hasn’t been confirmed by Japanese authorities.

According to sources, these new measures would essentially delve deeper into the nature of the applications than is currently the norm for applicants when making a case to operate in Japan, with a four-fold increase in questions. It is reported that possible links to antisocial groups will now be investigated and companies decisions making processes. The unnamed source stated on the weekend that the FSA had:

“…increased the number of questions asked when screening applications to about 400 items, up fourfold…Previously, the questions only covered such items as an applicant’s financial status and measures to ensure system safety.”

The FSA is cleaning up its act somewhat after recent hackings, notably following Tokyo-based Coincheck’s exchange was compromised to the tune of roughly USD 530 million. It followed this up by a series of onsite inspections recently which revealed that best practice was not being observed by many exchanges.

A key finding of the report following the last FSA inspections was that exchange’s internal control systems were showing signs of lagging behind, given the rapid increase of transactions; an increase partly accredited to investors climbing back into the market after 2017 recent falls. The Japan Virtual Currency Exchange Association (JVCEA) had called for trading limits in line with FSA suggestions earlier this year.

As part of the newly heightened examinations of exchange applications by the FSA, the agency earmarked six fully-licensed crypto exchanges which have been served with business improvement orders. Also, 13 exchanges who are operating whilst waiting for approval have withdrawn their applications, indicating just how rigidly they expected to be examined under the new application guidelines. Only three exchanges are left operating awaiting vetting by the FSA: Coincheck, Lastroots, and Everybody’s Bitcoin.

Due to Japan’s vibrant cryptocurrency space, there are estimated to be about 160 exchanges hoping to enter the Japanese market. The JVCEA recommended its own “appropriate regulations” for growth by proposing new rules that would affect the way exchanges operate, placing privacy coin listings and insider trading under the regulatory microscope.


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Japanese Actress Takes Role with Tokyo Police to Fight Cybercrime

Japanese singer and actress Rie Kitahara has appeared on behalf of the Tokyo Metropolitan Police Department in a public awareness campaign against cybercrime including crypto fraud.

Kitahara, well known in Japan as a singer in girl idol group Ngt48 and ex-band member of Akb48 and Ske48, took on the role of cybersecurity manager in a police department event in Tokyo. Some 1,700 guests attended the event last week which mainly focused on email phishing and fake websites. Ashai TV, who broadcast the event commented:

“Last year, the number of cases with cybercrime victims reported to the Metropolitan Police Department was 13,101 which has been decreasing overall, but the damage of unauthorized access to [steal] virtual currencies such as Bitcoin is increasing.”

The World Economic Forum has warned that cybercrime is one of the major risks in 2018 due to the rate of technological advancement worldwide. Its report, published earlier this year, indicated that the main reason for the increase is due to growing cyber dependency which has added to the volumes of data theft over time.

A chief security scientist has suggested that companies are slow on updating systems as new technologies arrive on the scene. Due to this, eight global economies, the USA, Germany, Estonia, Japan, Holland, Switzerland, Singapore and Malaysia all see cyber-attacks as a major threat

In terms of cryptocurrency trading, the Council of Anti-Phishing Japan has issued its own warnings regarding the use of email in particular, commenting, “We are working to raise awareness of the public not to immediately click the URLs indicated in the email.” It added that recipients should contact a legitimate crypto exchange employee before opening mail.

Reports suggest that the Tokyo Metropolitan Police Department has been cooperating with ten of the country’s largest crypto exchanges; SBI Virtual Currencies, Bitflyer, Bitpoint Japan, GMO Coin, Bittrade, Quoine, Bitbank, Btc Box, Money Partners and Coincheck.

The exchanges have agreed to “mutual cooperation, cybercrime reporting notification, criminal investigation cooperation, information sharing, [and] measures to prevent widespread damage”.


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Crypto Needs More Custodianship Checks and Balances

Much good cheer came out of this year’s Consensus 2018 Blockchain Summit in New York, without the Lambos. However, there are many industry professionals who still feel that the space needs to develop a sounder structure.

The well-used traditional banking model requires expensive multiple participant involvement for every transaction and underlies a system which is sagging to the degree that many global banking systems are now being wooed by blockchain for their own ends. Tradition banking’s potential to simplify and create speed and efficacy at low cost remain bank-central with little apparent regard for the user or client, although this would be denied by many institutions. Bank profits remain the ultimate concern rather than client usability, transparency and low fees.

All the reason why the word cryptocurrency has rocketed into the lexicon of all but the most closeted of individuals. The decentralized market offers the user control and removes it from the service provider; one of its main attractions.

However, the cryptocurrency space is not without flaws and these can be seen with reports of hackings, fraud, crypto exchange misconduct and rule bending. Mike Belshe of Pensions and Investments sees this liberal climate as one that needs more “checks and balances”, citing the Coinrail and Coincheck hacking losses of this year as an illustration of this lack of security.

Belshe suggests that it’s a case of a solid infrastructure which he argues the industry is still lacking, as ironically decentralization hasn’t prevented the onset of centralized exchanges taking on the role of custodians of user assets. The solution to this, according to Belshe, is custodianship which is not built around exchanges and is independent of them, differentiating the exchanger role from the holder role in terms of responsibilities. He argues this qualified custodianship may even be mandated by the SEC.

He said, “If you didn’t have a bank to store your savings, what would you do? Put bars on the windows? Install a safe in a secret wall? Bury it in the backyard? No. You entrust it to people who know how to keep it safe, who know how to make sure you have access to it and who have all the safeguards in place to protect the assets you are managing for others.”

The fundamentals of custodianship require complete and transparent security, storage and regulatory compliance as an absolute guarantee for investors and until this can be guaranteed, the industry is not ready to gain the confidence of every user, be it institution or individual.


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World’s First Bank-Backed Crypto Exchange Opens For Trading

VCTRADE, the world’s first bank-backed cryptocurrency exchange, is now open for trading in Japan after its launch last month, reports Coindesk..

The exchange, owned by Japanese banking giant SBI Holdings, has now opened trading to users aged between 20 and 70 years, after only servicing limited pre-registered users, providing that they are resident in Japan. Corporate entities are still unable to use the exchange at this time.

At the original launch last month, SBI announced that the VCTRADE platform would facilitate the trading of the Japanese yen against Ripple’s XRP. The company’s Chairman and CEO Yoshitaka Kitao recently said that he saw Ripple as becoming a universal digital currency to compete with Bitcoin in the future, due to the digital currency’s payment platform for international money transfer and remittance services.

The delay in VCTRADE’s opening for business was due to the need to upgrade the platform following a USD 533 million hack against another Japanese exchange, Coincheck, earlier this year. These moves illustrate SBI’s continued investment across the region investing USD 460 million in its AI and blockchain fund. Kitao commented:

“There’s a lot of speculative demand around cryptocurrencies, which is why the price is going up so quickly, but people need to think about how these technologies are being used in real life and how they can improve people’s businesses.”

Earlier this year, it was revealed that SBI had planned to launch a new cryptocurrency exchange and was also investing in renewable energy wind farm cryptocurrency mining cryptocurrency and was working on improved 5G mobile connectivity and AI.

In other news from Japan, South Korean exchange giant, Bithumb, is hoping to get a licence to operate in the country, although with tougher cryptocurrency rules following the Coincheck and Monocoin attacks, it may have to jump through some hoops. Its own exchange suffered a hack of USD 31.5 million recently.

If Bithumb is successful, it would open a new office in February of 2019. The company is reportedly planning to extend its reach overseas launching new faster and efficient platforms for worldwide traders.


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Coinbase Looks to Acquire Banking Licenses

Coinbase is currently looking into the processes involved in acquiring banking licenses. The Wall Street Journal reports that an undisclosed source revealed that the exchange engaged in conversations with members of the US Office of the Comptroller of the Currency in earlier this year:

“Coinbase Inc and another cryptocurrency firm talked to US regulators about the possibility of obtaining banking licenses, a move that would allow the startups to broaden the types of products they offer.”

Additional Coinbase services

Coinbase has been expanding its services this year to become more than just an exchange. Its commerce API or its “PayPal-like service”, was released in February. Merchants could quickly implement cryptocurrencies as a payment method supporting BitcoinBitcoin CashEthereum, and Litecoin. The platform adds a “PayPal-like” button to e-commerce sites allowing streamlined payments straight to the vendor’s wallet.

Coinbase isn’t the only company to offer these types of services, with BitPay also letting customers pay in Bitcoin and Bitcoin Cash. With the volatility within the cryptocurrency market this year it may take more to encourage merchants to adopt this additional payment method.

Coinbase announced this month that it would be releasing its Coinbase Custody platform. The new product could entice institutional investors, it went on to explain: “The cryptocurrency market is maturing rapidly as more sophisticated institutional participants enter the space. In fact, in the past few months over 100 hedge funds were created that exclusively invest in and trade cryptocurrency. Some of the world’s largest financial institutions have also recently announced their plans to begin trading cryptocurrency.”

Coinbase Custody is a storage service for a minimum of USD 10 million in crypto. Financial institutions will be expected to pay USD 100,000 as a set-up fee and an additional monthly premium dependant on holdings. Coinbase claimed: “We have leveraged our experience safely storing more than $20 billion of cryptocurrency to create Coinbase Custody, the most secure crypto storage solution available.”

Industry issues

Coinbase believes its recent progress will accelerate the world’s adoption of cryptocurrency by bringing new capital and greater awareness to the industry.

The volatility of Bitcoin still stands to be an issue and has led to merchants withdrawing the payment option. This was one of the main reasons for Steam halting Bitcoin payments at the end of 2017. The rise of crypto-related crime is enough to deter investors in the interim.

As much as 30,000 people who have fallen victim to Ethereum-related theft, suffering an average loss of USD 7,500 each, according to Chainalysis. Exchanges have been targeted in large-scale hacks with Coincheck losing USD 550 million worth of NEM cryptocurrency (XEM) in January and Coinsecure losing USD 3.5 million in Bitcoin (BTC). With legislation and regulation becoming a hot topic among unions and governments, 2018 is set to be an interesting year for cryptocurrencies.

Coinbases profitability values the company at around USD 8 billion. The growth and reinvestment into new ventures such as the banking industry shows Coinbase’s faith in the future of cryptocurrencies.

However, not everyone believes that the company is heading in the right direction. Reddit user Bitcoin Yoda explains how Coinbase Commerce is moving in a different direction to Satoshi’s vision: “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Any intermediary between your BTC payment and the merchant is violating the definition of Bitcoin and your privacy.”

Is Coinbase’s pursuit of becoming a bank turning its back on the ideologies behind crypto?


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