Previously hacked digital asset trading platform, Coincheck, continues to struggle as it recorded $5.25 million in losses during Q3 2018. Monex Group, a Japanese broker that acquired Coincheck after the hack which led to the theft of $534 million in NEM tokens, reported the losses its financial statement for Q3 on Monday (October 29th).
Coincheck’s operations, which account for Monex Group’s crypto-related business, generated 315 million Japanese yen (appr. $2.8 million) between the months of July and September 2018.
This is 66 percent less compared to Q2 revenue when Coincheck’s operations brought in about $8.4 million in total revenue.
Total losses for Coincheck during Q2 2018 were of about $2.3 million.
Monex Group's Acquistion Not Profitable So Far
According to the Monex Group, the Q3 losses may be attributed to the consequences of the damaging Coincheck security breach in January of 2018. This, despite operational costs for the group’s crypto business being significantly lower during the third quarter - when compared to previous months.
Monex Group’s financial report noted: "Since the service suspension in January 2018, Coincheck only allowed existing customers to sell their cryptocurrency." To date, acquiring the compromised Japanese exchange (for $33.5 million in April) has led to losses of around $7.5 million.
In response to the Coincheck hack, Japan’s financial regulator, the Financial Service Agency (FSA), began to monitor the operations of local crypto firms more closely. In 2018, the FSA has performed over 23 on-site inspections of local digital asset exchanges.
160 New Crypto Exchnages Want To Operate In Japan
As covered, 160 crypto exchanges had submitted an application to the FSA in order to offer their services in Japan. However, the FSA has not authorized any new crypto-related businesses to operate in the country this year.
There are currently 16 crypto exchanges licensed to operate in Japan, while another 16 have also been allowed to offer services, but are only “quasi-operators” as their license applications are still being reviewed by the FSA.
Coincheck reportedly has 1.7 million active users and its management is currently developing better internal security infrastructure, and working on implementing other measures to make its platform more secure - as this is now required in order to become a fully-licensed exchange in Japan.
Monex’s financial report also noted that it has 1,025 full-time employees with around 15 percent of them working in its crypto asset department.