Monex Refutes Reports of Coincheck’s Japanese Exchange License

The Monex Group, who purchased the Coincheck cryptocurrency exchange in April, released a letter on Wednesday (Dec 19) refuting an article that claimed the exchange received official approval from Japan’s Financial Services Agency (FSA).

An article from the Nikkei Asian Review on December 19th asserted that Coincheck’s exchange license was approved by the FSA and said an announcement would come at the end of the year.

The letter from Monex, releases later in the day, said media reporting about the matter “was not based on our announcement.”

Nikkei indicated in the article that it had “learned” about the approval by the FSA, but it was not immediately clear who its sources were.

As of press time, few additional details about the situation have been released.

A License After Coincheck Cleans Up Their Act?

The Monex Group said the exchange is being reviewed for a licence, but “there is not any fact regarding the registration that has been determined.”

It noted any pertinent information about Coincheck would be shared “in a timely and appropriate manner” moving forward.

Monex purchased the embattled exchange in April after hackers managed to steal about $511 million dollar's worth of cryptocurrency in January, according to the Nikkei Asian Review.

After the hack, the FSA issued two orders to the exchange to bolster business operations and patch up vulnerabilities related to customer protection and anti-money laundering.

The Nikkei Asian Review noted how the FSA allegedly acknowledged Coincheck had improved their systems after being purchased by Monex. It also paid out 46 billion Japanese Yen (roughly $411 million) to clients as compensation.

Coincheck Is Making A Comeback

CryptoGlobe reported in late October how the exchange was open to new account signups, and users would be permitted to carry out limited trades starting on October 30th.

The Monex Group indicated users would be able to buy and deposit bitcoin, Ethereum Classic, and Litecoin. Before Monex purchased the exchange, users were only allowed to trade bitcoin on the platform.

Monex noted at the time users might have the ability to trade other cryptocurrencies “if the services are confirmed safe and become ready to be offered.”  

However, Monex said it had lost about $7.5 million due to the operational costs of running the exchange after purchase. It said the damage from the January hack required large investment in security infrastructure.

Weekly Newsletter

BitMEX Slammed as Roubini Raises the Stakes in War Against Crypto

Neil Dennis

Every new concept has its critics and there's none so vehemently opposed to cryptocurrencies as New York University academic Nouriel Roubini, who has just taken his most vicious swipe yet at the emerging asset class.

In an essay entitled "The Great Crypto Heist", published this week on the website Project Syndicate, the NYU Stern Business School professor accuses financial regulators of "being asleep at the wheel" while an army of unregulated exchanges, propagandists and scammers commit "rampant fraud and abuse".

He singles out crypto-derivatives exchange BitMEX as being a particular threat to retail investors. Roubini clashed earlier this month with Arthur Hayes, the chief executive of BitMEX.


But first, the professor explains why the sector needs to be more closely monitored. The broader financial sector came under increased regulatory scrutiny following the 2008 financial crisis, to protect investors and society. 

The regulatory regime does not capture cryptocurrencies, however, which are launched and traded outside the domain of official financial oversight, he says.

The result is that crypto land has become an unregulated casino, where unchecked criminality runs riot.


He rounds on BitMEX, registered in the Seychelles, which offers highly-leveraged bets on the rises and falls of cryptoassets: products more broadly known as derivatives.

These investment products have come under the microscope of regulators in many countries. The UK's Financial Conduct Authority would like to ban the sale of cryptoasset derivatives and exchange-traded notes to retail customers, saying they are too difficult to value and are prone to extreme price movements due to the volatile moves of the underlying cryptoassets.

Other global regulators have made moves to reduce the amount of leverage offered by crypto-derivatives exchanges. Roubini points out that with a 100-1 leverage, even a 1% price move in the underlying assets could trigger a margin call that wipes out the investor's entire account and leave them owing the exchange.

Hayes, boasted openly that the BitMEX business model involves peddling to 'degenerate gamblers' (meaning clueless retail investors) crypto derivatives with 100-to-one leverage.

BitMEX aslo runs a proprietary trading desk - an internal, for-profit desk that trades cryptocurrencies with its own money - that has been accused of front-running its own clients, Roubini asserts. He adds:

Hayes has denied this, but because BitMEX is totally unregulated, there are no independent audits of its accounts, and thus no way of knowing what happens behind the scenes.

Perhaps his most grand accusation in the essay, however, is that exchange is being used for criminal activity:

BitMEX insiders revealed to me that this exchange is also used daily for money laundering on a massive scale by terrorists and other criminals from Russia, Iran, and elsewhere; the exchange does nothing to stop this, as it profits from these transactions.

Tiff in Taipei

Roubini accused Hayes this month of holding back the broadcast of a video recorded of their clash at conference in Taipei - to which Hayes had secured exclusive right to.

In the essay, he continues this accusation, saying:

I suppose this is par for the course among crypto scammers, but it is ironic that someone who claims to represent the 'resistance' against censorship has become the father of all censors now that his con has been exposed.

Crypto Cancer Metastasized

In his final dig at the industry, Roubini says crypto trading has created a multi-billion dollar industry that does not just include the exchanges, but also "propagandists posing as journalists, opportunists talking up their own books and lobbyists seeking regulatory exemptions.

It is time global regulatory bodies stepped in, he concludes:

So far, regulators have been asleep at the wheel as the crypto cancer has metastasized. At a minimum, Hayes and all the others overseeing similar rackets from offshore safe havens should be investigated, before millions more retail investors get scammed into financial ruin.

So far, Hayes appears to have remained silent following the article's publication. No activity on his Twitter account. But the ball is now firmly in his court as the war of words heats up.