Coincheck Begins Customer Refunds After Massive Hack: A Turning Point for Japanese Crypto?

Coincheck Takes Action on $534 Million Hack

Japanese cryptocurrency exchange Coincheck is making strides in regaining customer trust by initiating refunds for those impacted by the January 26 hack that resulted in a staggering loss of around $534 million worth of NEM. This announcement, made through two press releases on March 12, brings a glimmer of hope to customers waiting for recompense.

Resumption of Withdrawals and Sales

Coincheck has resumed withdrawals for various cryptocurrencies, including Ethereum (ETH), Ethereum Classic (ETC), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), and Bitcoin (BTC). Notably, sales for these cryptocurrencies, which had been suspended, are now back in action. This is particularly good news for crypto enthusiasts who loathe the phrase “pending withdrawal”.

Refunds and Compensation Rates

Starting March 8, Coincheck confirmed the launch of its refund initiative, which will provide compensation in Japanese yen at a rate of about 88.5 yen (approximately $0.83) for each NEM coin stolen during the hack. Imagine getting that sweet, sweet cash back, even if it’s in yen!

Regulatory Scrutiny and Internal Overhaul

Japan’s Financial Services Agency (FSA) reacted decisively to the hack, conducting inspections across 15 unregistered exchanges, including Coincheck. After these inspections, several exchanges received business improvement orders. Coincheck, in a bid to show accountability, stated, “We will solemnly and seriously take the measures we take carefully…” In that moment, they might as well have added, “and we promise to drink less during working hours too.”

The Aftermath and Legal Issues

In the fallout of the hack, Coincheck isn’t just dealing with customer refunds—they’re also facing legal battles. Ten crypto traders filed lawsuits in mid-February over the freezing of their crypto withdrawals. Adding fuel to the fire, another 132 investors launched a separate lawsuit in early March, claiming damages totaling approximately 228 million yen (around $2 million). Ditto to the saying, “Where there’s smoke, there’s fire,” in this case, it’s more like, “Where there’s missing NEM, there are lawsuits!”