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.

QuadrigaCX Has Sent Its Remaining Crypto to 'Big Four' Ernst & Young

The embattled Canadian cryptocurrency exchange QuadrigaCX has recently sent the remaining cryptocurrency it had in its hot wallets to ‘big four’ auditor Ernst & Young, which has been monitoring the proceedings in its creditor protection case.

According to an official report Ernst & Young released called the “Second Report of the Monitor,” QuadrigaCX sent nearly all its cryptocurrency to the auditor on February 14, after conducting a few test transactions to make sure it wouldn’t send them to the wrong address.

In total, the cryptocurrency exchange transferred 51 bitcoin, 952 ether, 822 litecoin, 33 bitcoin cash, and 2,033 bitcoin gold to the auditor. At press time, these cryptocurrencies are worth little over $410,000, an amount Ernst & Young is set to “hold the cryptocurrency in cold storage pending further order of the Court.”

The test transaction QuadrigaCX has made are notable, as earlier a costly blunder saw it inadvertently transfer 103 BTC ($468,000) to its cold wallets. The exchange has been unable to access its funds in cold storage since its founder and CEO Gerald Cotten unexpectedly passed away in India.

Ernst & Young’s report has also given the exchange’s creditors updates on its fiat holdings. It notes there are thee main sources: a payment processor called Costodian that holder about $25 million CAD in bank drafts, Stewart McKelvey which holds about $5.8 million CAD in bank drafts, and other amounts held by various third-party processors.

Costodian has reportedly already transferred about $20 million CAD to Ernst & Young, but is holding onto the remainder, and has claimed QuadrigaCX owns it $778,000 CAD in processing fees.

$145 Million Locked Away

The Canadian cryptocurrency exchange, as mentioned above, has been locked out of its cold storage wallets since its founder and CEO passed away, as he managed the operation through his laptop.

His wife Jennifer Robertson has since filed an affidavit where she revealed Cotten was single-handedly managing the exchange’s transactions, and that after he passed away no one was able to do so. Since then, the Supreme Court of Nova Scotia has granted QuadrigaCX creditor protection, and appointed Canadian law firms Miller Thomson and Cox & Palmer to represent its customers in the upcoming proceedings.

As CryptoGlobe covered, QuadrigaCX has already run out of funds, and a look into Cotten’s way of managing the exchange in the past has suggested users’ funds can be stored in paper wallets. The exchange’s downfall has cost at least one cryptocurrency enthusiast his $420,000 life savings.

Notably, blockchain researchers have released data that suggests QuadrigaCX didn’t have any funds stored in cold wallet, and even found suspicious transactions to other exchanges, including Poloniex, Bitfinex, and ShapeShift.