A week ago, Monex Group, a Japanese-based financial services firm, announced that they were planning on acquiring the Japanese cryptocurrency exchange, Coincheck. This deal, which was all the talk over the past few days, was recently confirmed by both parties.
A Tough Start to 2018
Earlier this year, Coincheck suffered a hack which left them hanging from a thread. During the hack, the exchange lost approximately $530 million US dollars worth of the XEM cryptocurrency. Many investors immediately lost trust with the exchange and demanded that something be done as the loss of these funds was put under question.
Coincheck suffered from a hack on their XEM “hot” wallet. This kind of wallet is a wallet in which the coins are constantly connected to the internet and is more subject to hacking by external parties.
Coincheck acknowledged their mistake and recently began to reimburse XEM holders affected by the hack out of their own pockets. Coincheck decided to compensate XEM holders at approximately $0.83 US dollars for each coin, which was almost double the market price of the cryptocurrency at the time of reimbursement.
By the end of this compensation phase, Coincheck spent over $430 million USD equivalent of yen on customers for their stolen tokens. Although this was not a full compensation as the price of XEM was at around $1.00 US at the time of the hack, this was still an unprecedented move which must have hurt the finances of the company.
Along with this reimbursement, the exchange finally resumed trading on the platform as they believed that they had added the proper security measures.
However, this did not fully stop the less-than-spectacular news which surrounded Coincheck. There was still talk about lawsuits which were still on the table against the exchange, not to mention their ongoing wait for license approval.
A Promising Future
To counter the bad press around the exchange, Coincheck and Monex has decided to work together and alter the executive team at the exchange. Once the deal is fully finalized and Monex takes over the exchange, several billion yen will be infused into the cryptocurrency exchange. Also, executive changes will occur as the current president and COO of the exchange will step down.
Executive changes are often a good way for companies to, in a sense, start anew after bad news. These changes make sure that new eyes and ears are set into place to provide a new perspective and to break away from a troubled past.
With the loss of the current president of Coincheck, Monex COO Toshihiko Katsuya will move into the now empty position. Toshihiko is expected to excel as the new president of the exchange as he has experience in working with online finances in his prior job at Monex. This move will be important in the rebuilding of the exchange’s reputability and strength as one of the largest exchange in Japan.
Do you think that this move will help Coincheck in the future? If so, how do you think that it will help? Tell us in the comments below.
Images courtesy of Japan Times, Pixabay, and Bitcoinist archives.
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Written by Nick Chong @ http://bitcoinist.com/coincheck-confirms-takeover-monex-group/ April 5, 2018 Nick Chong