Coincheck submits biz improvement report

February 14, 2018

Tokyo- Major Japanese cryptocurrency exchange Coincheck Inc. submitted to the Financial Services Agency on Tuesday a business improvement report following the recent theft of 58 billion yen worth of digital money.

The report included measures to strengthen the security of its computer system, the protection of customer assets and its management structure.

Coincheck on Tuesday restarted allowing customers to withdraw yen deposits from their accounts. The company said it has transferred a total of 40.1 billion yen to customers at their requests.

Coincheck got most of the NEM assets of its customers stolen through unauthorized access on Jan. 26, immediately halting the withdrawals of yen and virtual currency assets.

While yen withdrawals have restarted, Coincheck maintains the freeze on cryptocurrency withdrawals, claiming that it remains unable to verify the safety of its system.

"We're making improvements step by step in order to ensure our business continuation," board director Yusuke Otsuka told reporters in front of the Coincheck head office in Tokyo.

Otsuka claimed that some preparations have been made for the planned reparation payments to some 260,000 customers who are victims of the theft of NEM, which trades under the symbol XEM.

But he was short on details, such as when to start such payments.

After the massive heist came to light, the FSA issued a business improvement order to Coincheck on Jan. 29 and started an on-site inspection on Feb. 2.

The company had inadequate measures to ensure the safety of customer assets.

It managed customers' NEM assets on a system kept connected to the Internet. In addition, the company lacked an appropriate system to monitor sharp decreases in customer assets in order to detect unauthorized access.

Coincheck said it has cut off its virtual currency management systems from the Internet. In the business improvement report, the company promised to take additional security measures.

Informed sources said the report also includes a plan to set up a third-party panel to review the company's management system. Jiji Press