Prior to the theft, Coincheck was the biggest crypto-currency exchange in Japan. The hacking incident forced Coincheck to halt trading, leaving its clients with no sales option as the market entered into a long decline. After the Monex Group, an online brokerage firm, took over Coincheck in April, the FSA discovered that the company improved customer safety and other related systems.
In April 2017, Japan amended its Payment Services Act to guard customers and avoid money laundering. A licensing system for cryptocurrency exchanges was built-in in the amendment. Coincheck was already in operation at that time and was permitted to carry on business on an interim basis while anticipating a license decision.
After Coincheck had been hacked, the FSA advised the exchange twice to better its business operations; the agency found that it was not equipped enough to protect its clients and stop money laundering.
Now Coincheck, a Monex Group subsidiary, has taken steps to review how it selects the cryptocurrencies for listing in its platform. After bearing in mind the decline of the cryptocurrency market, Coincheck compensated its clients by 46 billion yens. The FSA’s verdict to grant Coincheck a license is anticipated to spark off the reopening of the authorization process for the agency. There are roughly 200 companies waiting for licenses.
The FSA will scrutinize business plans, anti- hacking measures and the effectiveness of shields against other bad behavior when deciding whether to issue licenses.