Rising Scrutiny

The announcement came less than 48 hours after the hack was discovered on Friday.

The attack shocked Japanese policy makers, who introduced legislation last April precisely to prevent such disasters, and piled pressure on global crypto markets wary of rising scrutiny from regulators.

It was not clear how Coincheck secured the funds necessary to repay customers. Late on Friday, the exchange disclosed that co-founders Koichiro Wada and Yusuke Otsuka owned the majority of shares in the company. Other investors include Tokyo-based venture firm Anri and California-based WiL LLC, according to Otsuka.

The startup has about 80 employees and began cryptocurrency operations in 2014, it said.

Coincheck didn’t respond to an email requesting more information and verification of the authenticity of the statement. Multiple phone calls placed to two different numbers went straight to voice mail.

Past Deadline

Coincheck was four months past its deadline for receiving a license necessary to operate, as part of Japan’s new legislature to vet and audit cryptocurrency exchanges.

It was allowed to continue operating while awaiting a decision from the Financial Services Agency.

The agency is getting ready to penalize Coincheck in relation to the hack, the Yomiuri newspaper reported on Sunday without saying where it obtained the information.

Media reports also said the FSA will ask company officials Sunday about the circumstances leading to the loss, and the security measures in place.

If Coincheck successfully navigates the theft, the turnaround wouldn’t be the first in the cryptocurrency world. Bitcoin exchange Bitfinex also overcame a $69 million heist and last year repaid most customers who lost money in the August 2016 attack. (Bloomberg)