Japanese authorities raid Coincheck headquarters | News | DW | 02.02.2018
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Japanese authorities raid Coincheck headquarters

Coincheck is facing scrutiny after losing $530 million (€424 million) in a recent hack. The Japanese government has been trying to regulate the cryptocurrency exchanges since 2017.

Coincheck currency exchange as seen on a smartphone (Imago/Kyodo News)

A look at the Coincheck currency exchange in a smartphone app

Japanese Financial Services Agency (FSA) carried out a search of Coincheck's headquarters on Friday, as authorities step up their efforts to regulate cryptocurrencies following a recent hack. The breach of the virtual currency exchange was one of the world's biggest cyber heists to date.

"We have launched an on-site inspection to ensure preservation of clients' assets," Finance Minister Taro Aso said at a briefing on the operation.

Read moreJapan sanctions Coincheck after massive NEM coin heist

Watch video 04:57

Yet another cryptocurrency

The FSA inspection focused on compensation of customers, financial conditions and system management at the exchange. It also focused on Coincheck's efforts to ensure consumer protection, a senior official said.

Japanese officials argue that Coincheck lacked proper security measures and made itself vulnerable to the hack.

Coincheck submitted an application with the FSA in 2017, which was still pending official approval due to concerns with its security gaps. Nonetheless, Coincheck was allowed to operate.

The FSA has given Coincheck a deadline of February 13 to complete an investigation into the cause of the theft. It must also deal with clients "properly," strengthen risk management and take preventive measures.

Read moreBitcoin: EU approves cryptocurrency clampdown to combat terrorism financing

The biggest hack

On January 26 hackers managed to steal $530 million worth of the cryptocurrency New Economy Money (NEM). The last theft of this size occurred in 2014, when more than $480 million in bitcoin was stolen from Japan's MtGox exchange.

After the MtGox hack, Japan became the first country to introduce a law to regulate the cryptocurrency exchanges in 2017.

jcg/kms (Reuters, AFP, AP)

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