The price of altcoin NEM (XEM) increased by nearly 19 percent today following the news that Japanese cryptocurrency Coincheck has completed a promised refund to customers and resumed some trading services.
In a report from the Japan Times, the Tokyo-based exchange distributed ¥46.6 billion ($440 million) to all 260,000 customers who lost their holdings of XEM, the native token for NEM during the Coincheck hack at the end of January. [1]
In a blog post from yesterday, the exchange explained that it would refund users at the rate of 88.549 Japanese yen ($0.83) per NEM token that was stolen during the hack. [2]
The company is said to have used their own funds to reimburse its customers.
According to company spokesman Yosuke Imai, ‘procedures have been completed with the accounts of all 260,000 customers.’
Trading also resumed at the exchange following a month-long suspension that saw users’ assets frozen as Coincheck undertook procedures to improve security protocols. In response to the news, the price of NEM rose to $0.45, earlier today, prompting investors to trade $140 million dollars worth of the altcoin in 24 hours.
On the 26th January, thieves were able to steal 523 million units of NEM, worth around $530 million, in what has become the largest hack of its kind. Responding to the situation, Japan’s Financial Services Agency (FSA) suspected that it was down to a lack of proper security measures that allowed the thieves to siphon off with customer assets.[3]
After inspecting the exchange, the FSA subsequently issued Coincheck with two improvement orders.
The move to reimburse customer funds is in response to several lawsuits filed against the exchange in addition to the FSA’s concerns over how it was going to refund customers. Last month, Coincheck was hit by two class action lawsuits from frustrated investors over withdrawal freezes.
The first lawsuit involving a group of seven investors wanted the exchange to allow it to withdraw assets worth up to $183,000. The second, which consisted of 132 investors, were seeking a reimbursement of $2.1 million after their assets were frozen.[4][5]
The hack at Coincheck has put the limelight on Japan’s crypto exchanges and the measures they have in place to ensure customer assets are safe. As a result, the FSA suspended two digital currency exchanges for a month – Kanagawa-based FSHO and Nagoya-based Bit Station – as it ordered Coincheck to ‘conduct a drastic review on its management team’ last week.[6]
According to the FSA, Bit Station intends to drop its application to become a registered exchange.
References
- ^ Japan Times (www.japantimes.co.jp)
- ^ blog (corporate.coincheck.com)
- ^ lack of proper security (coinjournal.net)
- ^ $183,000 (www.reuters.com)
- ^ reimbursement of $2.1 million (www.sankei.com)
- ^ FSA suspended two
