FSA launches inspections over virtual currencies

Jiji Press TOKYO (Jiji Press) — The Financial Services Agency has launched on-site inspections of virtual currency exchange operators other than Coincheck Inc., which lost massive customer assets due to hacking last month, Financial Services Minister Taro Aso said Friday.

“We’re looking into the exchange operators’ internal control structures, including how system risks are managed,” Aso told a press conference.

According to informed sources, the FSA sent inspectors to Osaka-based Tech Bureau Corp. and Tokyo-based GMO Coin Inc. by Friday. They will start inspecting the two exchange operators on a full scale shortly.

The financial industry regulator is considering expanding the scope of inspections to all virtual currency exchange operators doing business in Japan, excluding Tokyo-based Coincheck, totaling 31, the sources said.

On Jan. 26, Coincheck lost almost all cryptocurrency NEM assets of some 260,000 customers, worth some ¥58 billion at the time, due to unauthorized access to the company’s computer system.

While issuing a business improvement order to Coincheck and launching an inspection on the exchange operator, the FSA ordered others in the same industry to check their system administration and business management setups and to submit reports on them.

After carefully examining the reports, the regulator judged it necessary to find out additional details through on-site inspections, according to the sources.

Coincheck to allow withdrawals

Coincheck is planning to restart customer withdrawals of yen deposits as early as Tuesday, it was learned Friday.

The company is moving toward the resumption as it has been able to confirm the security of the part of its computer system for yen withdrawals, informed sources said.

Coincheck suspended withdrawals of deposits in yen as well as in virtual currencies after the theft of its assets.

It is not yet clear when Coincheck will be able to allow withdrawals of deposits in virtual currencies, the sources said.

The company is now investigating how the largest-ever heist from a virtual currency exchange took place and conducting security checks on its system.

Tokyo man sues Coincheck

A Tokyo man in his 40s sued Coincheck for damages on Thursday.

In the lawsuit filed with Tokyo District Court, the plaintiff, who had deposited tens of thousands of yen worth of NEM at Coincheck, complained that the exchange operator kept customers’ assets in a computer system connected to the Internet, although it should have managed such assets in an offline computer.

Coincheck committed a serious breach of duty by not taking appropriate security measures for its computer system, said the man, who runs his own business.


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