Hacked Crypto Exchange Coincheck Sold to Monex For $34 Million

  • Months after losing over $500 million in one of crypto's biggest breaches ever, Coincheck will be acquired by an online brokerage firm in Japan
  • The deal will see Monex pay $34 million for all of Coincheck's shares. The exchange's founding president and COO will step down from management.

Japanese brokerage firm Monex Group has confirmed the acquisition of embattled cryptocurrency exchange Coincheck for 3.6 billion yen ($34 million), scheduled later for this month. The Tokyo-based exchange was hacked earlier this year, when a staggering $530 million worth of NEM tokens were stolen.

As recently reported Coincheck accepted Monex’s acquisition bid. This morning, Monex announced it will be acquiring 100 percent of Coincheck’s shares, which are currently over 45 percent owned by Coincheck CEO Koichiro Wada. About 5 percent belong to a board member and just under 50 percent are in the hands of six other stakeholders.

Coincheck’s founding president Koichiro Wada and its chief operating officer Yusuke Otsuka will step down from the cryptocurrency exchange’s management when the brokerage firm takes over. In its press release, Monex recognized blockchain technology and cryptocurrencies “are likely to drastically change the way people approach money.”

The firm added:

“Most especially, the cryptocurrency exchange business plays a core part in a vision of “MONEX’s new beginning”. Therefore, the Company has resolved on 100% share acquisition of Coincheck who has been a pioneer among cryptocurrency exchangers.”

Monex's press release

The Japanese online brokerage’s CEO Oki Matsumoto has announced plans to obtain regulatory approval for the exchange, with an aim to have Coincheck operational again in two months. Matsumoto even stated that Monex intends to have an IPO for Coincheck’s shares, a move that has never been done by a Japanese exchange.

Monex further acknowledged Coincheck’s hack, and revealed it’s going to support the exchange in order to “provide secure environment to customers and to grow sustainably as a socially valuable cryptocurrency exchange.”

Coincheck Hack

The stolen tokens were reportedly stored in a hot wallet, and not secured in cold storage as is standard practice with such a large sum. The exchange cited technical difficulties and a lack of staff as the cause for one of the largest crypto heists in history, dwarfing even the notorious Mt Gox breach of 2014.

Since the hack, 132 investors have joined a class-action lawsuit against Coincheck for the refund of their stolen assets. The exchange is under investigation by the Japanese Financial Services Authority (FSA), which recently suspended several Japanese exchanges as a result of poor security and compliance standards.

Zcash 'Company' Changes Name to 'Zerocoin Electric Coin Company' for More 'Clarity'

The Zcash company, which supports the ongoing development of the Zcash (ZEC) platform, a leading privacy-oriented cryptocurrency, has rebranded to the Electric Coin Company.

According to an official company blog post, the name change from “Zcash company” to “Electric Coin Company” was made in order to have more clarity. Explaining that the “legal name” for the firm was always “the Zerocoin Electric Coin Company, LLC”, the organization clarified that it had been referring to itself as “the Zcash company.”

However, the company’s blog noted that the development of “Zcash” is a community-based project and that some of the privacy coin’s business-related initiatives may involve the Zerocoin Electric Coin commercial entity. Moreover, Zerocoin’s operations are not directly associated with the Zcash Foundation - which in itself is a “separate and independent” organization, according to the z.cash blog post. Notably, the Zcash Foundation has “its own mission, team, and board of directors.”

Rebranding Process: New Domain, Change Office Sign

Acknowledging that it will take the company “a little while to get the new branding right, launch a new domain, and change out the sign at the office”, the company blog mentioned that “the name change is public.” Except for the name change, the entity associated with Zcash explained: 

We are the same team, with the same mission: to empower everyone with economic freedom and opportunity. We developed and help steward Zcash.

Zerocoin's Research & Engineering Projects May Not Be Integrated Into Zcash 

Notably, the Electric Coin Company is currently working on “research and engineering [projects] that may, or may not” be integrated into the Zcash codebase, the blog noted. At present, the Electric Coin team consists of around 30 professionals from across the globe that are involved in the following initiatives:

  • “Product Development and Support”,
  • “Builds Zcash software”,
  • “Participates in cryptographic research”,
  • “Works with third parties to perform regular security audits of Zcash”,
  • “Improves the safety and security of the Zcash network”,
  • “Works on the Zcash user experience, such as the reference wallet” 

Company Website, Social Media Accounts To Be Changed/Updated Soon

In addition to working collaboratively on the initiatives listed above, the Electric Coin company helps in “translating content into different languages”, creates "educational content”, and supports the overall development of the Zcash platform.

As mentioned in the company’s announcement, the Electric Coin company “information will be moved from https://z.cash/ to a new domain with its own website.” Social media accounts associated with the company will also be updated.