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Japan sanctions Coincheck after massive cryptocurrency heist

Japan sanctions Coincheck after massive cryptocurrency heist
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Tokyo: Japan on Monday imposed administrative measures on virtual currency exchange Coincheck after hackers stole hundreds of millions of dollars in digital assets from the Tokyo-based firm in one of the biggest heists ever.

Units of the cryptocurrency NEM worth $530 million were taken –based on the exchange rate on Friday –exceeding even the $480 million in bitcoin stolen from the MtGox exchange in 2014. Coincheck suspended trading of all cryptocurrencies except bitcoin on Friday, and said it had lost 523 million units of NEM, the 10th biggest cryptocurrency in the world based on market capitalisation.
The Financial Services Agency (FSA) said in a statement that it had ordered Coincheck to investigate the cause of the incident, "properly" deal with clients, strengthen risk management and take preventive measures.
The financial watchdog told the exchange to respond to the orders by February 13, warning that the agency would raid its office if necessary.
Coincheck has said it will use its own funds to reimburse about 46.3 billion yen (around 430 million) –at a rate of 88.549 yen per NEM –to all 260,000 customers who lost their holdings. The company said it would reimburse customers in yen, not cryptocurrency.
The FSA said at a briefing Monday that it was checking to ensure Coincheck had the ability to make those refunds.
The watchdog added that it was carrying out checks at other exchanges in the wake of the theft to detect potential security problems. The agency will supervise Coincheck to ensure the measures are being implemented and contracts are being honoured, Chief Cabinet Secretary Yoshihide Suga said at a regular briefing.
"While examining the cause of the incident and taking necessary measures, we want the ministries and agencies concerned to urgently study what further measures we'd need," the top government spokesman said.
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