Japan punishes crypto exchanges after hack
8 March 2018 5:59 PM GMT
Tokyo: Japanese authorities on Thursday ordered two cryptocurrency exchanges to suspend operations as part of a clampdown following a massive hack that saw thieves steal hundreds of millions of dollars in virtual currency.
The Financial Services Agency (FSA) said in a statement it had ordered FSHO and Bit Station, exchanges based in Yokohama and Nagoya, to temporarily halt their operations for a month from Thursday.
The agency alleged that FSHO "does not have a proper system to monitor trading and has not given training to its employees," while an employee of Bit Station "diverted digital currency deposited by clients for his personal use."
Authorities also ordered five other exchanges, including Coincheck, to improve their business practices.
Coincheck was already slapped with sanctions in January following the hack. The hack of Coincheck — resulting in the disappearance of NEM cryptocurrency worth 530 million — was one of the largest of its kind, and prompted authorities to search the firm's office last month.
The company has already pledged to reimburse about 400 million to all 260,000 customers who lost their holdings of NEM, then the 10th biggest cryptocurrency by market capitalisation.
But it is unclear how and when the money will be reimbursed. In February, seven plaintiffs — two companies and five individuals — filed a lawsuit against Coincheck.
They are seeking the reimbursement of 19.53 million yen ( 184,000) in virtual currencies and further compensation for interest lost due to the hack.
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