Back in January, Coincheck was the victim of a huge hack that left more than $500 million worth of NEM tokens missing. Hackers managed to take advantage of huge security flaws in the exchange in order to clean out its accounts. Following the attack, the Japanese Financial Services Authority (JFSA) requested that it reapply for regulated status. It has since been working on improving its systems and applying to become regulated once more. The JFSA is purportedly very close to giving Coincheck the green light to expand its operations, but the deal isn’t over the line quite yet.
JFSA Releasing New Regulations
Earlier this week, the JFSA teased new updates to its crypto regulations and stated that exchanges can’t expand operations until they are fully regulated. Coincheck was one of the exchanges listed in the new draft regulations that are not allowed to expand their operations. These new regulations will help exchanges become more secure and avoid hacks and major security breaches. No release date has been announced, but these new regulations are expected to come into force in early 2019.
Trading Volumes Continuing to Fall
Since it was hacked back in January, Coincheck’s daily trading volume has been steadily declining. This could be attributed to the bearish market we have seen this year, but it’s more likely to be fallout from the hack. After services were restored and trading could resume, the exchange was banned from adding new trading pairs. This lack of new trading pairs coupled with a deep-set mistrust for the exchange is likely the key driving force behind the falling trade volume. Hopefully, Coincheck can pick its volume back up when it’s fully regulated, but only time will tell.
Exchanges Faking Trade Volume
It’s well known that a lot of exchanges are wash trading to inflate their trading volume, in order to earn a higher ranking on Coin Market Cap. However, more of these exchanges are getting called out on the practice and traders are leaving the exchanges over mistrust. Coincheck isn’t participating in this – at least that’s what believed – as if it was it could be the final nail in the coffin for the embattled crypto exchange.
If Coincheck manages to secure fully regulated status by the end of the year, 2019 could be a bumper year for the exchange. However, as the JFSA is about to roll out new regulations we could see the final verdict delayed until as late as Q2 2019. Either way, 2019 is set to be a huge year for the crypto exchange, as it can finally get back to growing its business.