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Coincheck contemplates tie-up to recover customer confidence

Japanese cryptocurrency exchange Coincheck are deliberating a capital tie-up in order to regain the trust of both investors and public following a major hack recently.

While they might be a top dog as far as cryptocurrency exchanges go, it looks as though Tokyo-based Coincheck is looking for a watchdog to keep its company safe.

About a month ago, Coincheck fell prey to hackers and suffered a loss of over $534 million USD worth of NEM coins. The incident left Coincheck’s customer-base of over one million vulnerable, and the company is fighting to regain their trust.

Two weeks ago, seven Coincheck investors hit the company with lawsuits in order to seek crypto-compensation for their lost funds, instead of the company’s proposal to repay the money in yen. Another group emerged to sue Coincheck last week and a third group is looking to appear soon.

In spite of Coincheck’s quick action after the initial hack, such as suspending NEM withdrawals and promising compensation, there are still concerns that the exchange will face another hack attack and this, coupled with the company’s need to recompense the victims’ lost money, could harm the exchange’s already vulnerable disposition and might push users to check out of Coincheck.

It’s not only Coincheck to come under fire for the theft; the Japanese Financial Services Agency is under a heavy line of questioning regarding its role in protecting the economic safety of the public, despite the thorough on-site inspections they conducted of cryptocurrency exchanges in Japan following the major hack.

On Monday, in an effort to rebuild trust from investors and traders, Coincheck released a statement to Japanese news agency, Jiji Press, and “expressed its eagerness to continue its business” while looking to “strengthen its computer security system and information disclosure policy.

Despite the hack and subsequent lawsuits, Coincheck is still reputable on the cryptomarket as one of the leading Japanese exchanges and there are several potentials, including an investment fund, to align with the exchange and retain customers and reduce asset risk.

While hacks are certainly not uncommon and these incidents do little to alleviate skepticism around cryptocurrency, it is encouraging, for both Coincheck investors and cryptocurrency traders, to see that the exchange is earnestly attempting to develop their security and restore customer confidence.

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