Coincheck Considers Capital Tie-Up to Regain Public Trust

The reputation of the exchange is at stake after the theft.

Amid the theft of $530 million worth of NEM tokens, Japanese cryptocurrency exchange Coincheck is considering a capital tie-up to regain the trust of the investors, reported the Japanese news agency Jiji Press.

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According to the source of the news agency, multiple potential partners are in line to join hands with Coincheck, including an investment fund.

Setting aside the recent controversy, Coincheck has a good reputation on the market. It is one of the largest cryptocurrency exchanges on the island nation and has a user base of more than a million. Jiji Press quoted an official in the digital currency industry: “Coincheck’s customer base of over one million is fascinating.”

However, the month-old hack has put the security features of the exchange under question, and many skeptics believe that the vulnerable exchange might face another cyber-attack again. This could drive users away from Coincheck.

“Investing in the company could involve great risks,” an official at a financial institution said.

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On Monday, Coincheck released a statement mentioning its eagerness to continue its business and assured customers that it is taking necessary steps to strengthen its computer security system and information disclosure policy.

Ongoing lawsuits

Coincheck was proactive after the theft and immediately suspended withdrawals from the platform. Though the exchange assured compensation to all the victims in yen, many investors and traders are not taking the exchange’s assurance that well.

Seven investors slapped the exchange with a lawsuit seeking the compensation to be in their lost cryptocurrencies rather than yen. The group of investors also requested an annualized interest of 5 percent on the value of the digital coins from notification of the claim against Coincheck until the group resumes withdrawals.

On 22nd February, another group of victims surfaced to sue the exchange and a third group is also scheduled to be established, reported news.bitcoin.com.

Whom to blame?

Japanese financial watchdog the Financial Services Agency (FSA) is facing a lot of criticism as questions have been raised about its role in protecting the public interest. After the theft, the FSA had undergone a rigorous scrutiny of all the cryptocurrency exchanges operating within Japanese border.

However, one of the sixteen registered exchanges faced a major technical glitch after the FSA’s on-site inspection and ended up offering free Bitcoins for around 20 minutes.

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