Japan’s financial regulator said on Monday the idea could inspect all cryptocurrency exchanges along with ordered Coincheck to get its act together after hackers stole $530 million worth of digital money coming from its exchange in one of the biggest cyber heists on record.
The theft highlights the vulnerabilities in trading an asset of which global policymakers are struggling to regulate along with the broader risks for Japan as the idea aims to leverage the fintech industry to stimulate economic growth.
The Financial Services Agency (FSA) on Monday ordered improvements to operations at Tokyo-based Coincheck, which on Friday suspended trading in all cryptocurrencies except bitcoin after hackers stole 58 billion yen ($534 million) of NEM coins, among the most well-liked digital currencies from the globe.
Coincheck said on Sunday the idea could return about 0 percent with internal funds, though the idea has yet to figure out how or when.
The NEM coins were stored in a “hot wallet” instead of the more secure “cold wallet”, which operates on platforms not directly connected to the internet, Coincheck said. the idea also does not use an extra layer of security known as a multi-signature system.
The hack has drawn into focus Japan’s approach to regulating cryptocurrency exchanges. Last year, the idea became the first country to regulate exchanges at the national level – a move of which won praise for boosting innovation along with protecting consumers, along with of which contrasts sharply with crackdowns in South Korea along with China.
The FSA said the idea ordered Coincheck to submit a report on the hack along with measures for preventing a recurrence by Feb. 13, along with of which the idea will, if necessary, conduct on-site inspections of various other cryptocurrency exchanges.
The regulator also said the idea has yet to confirm whether Coincheck had sufficient funds for the reimbursement.
nevertheless the regulator does not have any rules banning the use of “hot wallets” by exchanges, nor does the idea set requirements on how much should be kept in “cold wallets,” an FSA official said at a briefing.
In response to FSA’s order for improvements, Coincheck said in a statement of which the idea could promptly strengthen its customer protection along with governance, along with develop its risk management systems.