Compromised Crypto Exchange Coincheck Reopens New Account Signups & Limited Trading

Omar Faridi
  • Previously hacked exchange, Coincheck, has reopened new account signups, however, strict KYC checks are required.
  • Only bitcoin (BTC), ethereum classic (ETC), bitcoin cash (BCH), and litecoin (LTC) deposits and trading are allowed at present.

Monex Group, a Japanese brokerage firm that acquired previously hacked digital asset exchange, Coincheck, (in April) announced that the crypto trading platform has reopened new account signups.

Users will also be allowed to engage in limited trading starting from Tuesday (October 30th).

Monex Group’s announcement further noted that users may purchase and deposit a select few cryptocurrencies on Coincheck. These include bitcoin (BTC), bitcoin cash (BCH), ethereum classic (ETC), and litecoin (LTC).

Recovering From Damaging Hack

When Monex acquired Coincheck for $33.5 million in April, bitcoin had been the only digital currency that users were allowed to trade on the hacked platform. As covered, Coincheck accounts for most of Monex Group’s crypto-related business.

However, the operational costs associated with managing Coincheck after the acquisition have resulted in losses of about $7.5 million. According to the Monex Group, the exchange has not been profitable because of the damage caused when it was hacked in January. At present, Monex Group has 1,025 employees and around 15 percent of them are focused on the crypto segment of its business

Due to the security breach, which resulted in $534 million in NEM tokens being stolen, Monex’s management team has had to spend considerable time, money, and effort in order to improve Coincheck’s internal security infrastructure. 

This is also a requirement as Japan’s financial regulator, the Financial Service Agency (FSA), has increased its scrutiny of local digital asset exchanges due to several local exchanges being hacked.

Other Cryptocurrencies May Be Added Later

In its announcement, the Monex Group also noted that in the future, it may allow Coincheck users to trade ethereum (ETH), ripple (XRP), nem (XEM), lisk (LSK), and factom (FCT). However, the exchange will only add more coins “if the services are confirmed safe and become ready to be offered”, the notice stated.

Users currently looking to open an account on the Coincheck trading platform will have to submit identity documents in order to pass know-your-customer (KYC) checks. This is strictly enforced by Japan’s self-regulatory body, the Virtual Currency Association (JVCEA) - which was recently authorized by the FSA to create and enforce regulatory policies as they would apply to local digital asset exchanges.