Raids were done on a slew of cryptocurrency exchanges after thieves hacked and stole US $530 million worth of digital currency. The Coincheck hack was considered the largest ever hacking done on virtual currencies. Since then, Japanese authorities decided to serve Coincheck with an administrative order. According to Taro Aso, the Japanese Finance Minister, more raids are to be expected and expanded. Aso explained, “We have started to raid several virtual currency exchanges.” He added that the raids’ goal was to “examine their internal governance structure”.
The finance minister also acknowledged the need for the government to make its supervision of digital currency trading stronger. Officials also cited Coincheck’s need for appropriate security measures as the reason it became vulnerable to hacking and theft. Since the hacking, Japan’s Financial Services Agency ordered a slew of local cryptocurrency exchanges to send reports on their attempts to check their system’s risks.
The hack, which occured on January 26, saw thieves take more than 500 million NEM cryptocurrency units from Coincheck. The last time a similar hacking happened was in 2014 when more than $US400 million digital currencies were looted from MtGox – a Japanese exchange. New regulations were issued after the 2014 incident. Since then, exchanges had to acquire an FSA license. However, in Coincheck’s case, the firm was permitted to be operational while its application was still being reviewed by the agency. Coincheck assured customers who lost their digital money that they will be appropriately reimbursed even while an investigation is still underway. Reports claim that the hack accessed Coincheck’s data from outside Japan, possibly Germany, the U.S. and the Netherlands. Other reports state that a part of the cryptocurrency illicitly acquired were sent to New Zealand. After the hacking, various regulators from around the world put up their own rules, restrictions, and regulations on digital currencies.