Coincheck’s impending lawsuit came to fruition today as affected crypto traders sought to force the Japanese exchange to allow them to withdraw their assets that had been frozen. The development is the latest legal setback for Coincheck, having incurred a heist of move than $500 million in NEM coins late last month.
The episode has reverberated across the cryptocurrency space in Japan, leading to fresh calls for regulation and placing Coincheck’s security protocols under greater scrutiny. Last month, the exchange made the decision to abruptly freeze all withdrawals from the exchange on after a user holding $123 million worth of Ripple tokens suddenly left the exchange with all of their assets; other users with sizeable holdings also reportedly departed from the exchange after the revelation of the NEM hack.
Just days after the attack however, Coincheck announced that it would be paying back users $0.81 for every dollar worth of NEM that was taken from them, however this timeline for the payback has not yet been determined. In the meantime, crypto investors have taken matters into their own hands, culminating in today’s lawsuit.
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The suit against Coincheck is aimed at forcing the group to allow upwards of seven investors to withdraw their frozen assets that are worth up to $183,000, per a Reuters report. 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.
The suit filed against Coincheck could spur a tsunami of legal actions brought against the besieged exchange, given a multitude of investors have had to grapple with the same conditions. For its part, Coincheck reiterated its curbs on withdrawals of all cryptocurrencies until it could guarantee the secure resumption of its operations.
Investors however are quickly losing patience. Proponents for crypto regulation in Japan and abroad have also seized on the Coincheck hack. Consequently, the move has sent shockwaves through the world’s government and financial institutions, many of whom have been collectively scrambling over the past several months to figure out how to appropriately regulate crypto.
For many, the hack has only strengthened existing fears and beliefs that cryptocurrency is dangerous, volatile, and insecure.