One year after it was hacked and lost $500 million in various cryptos, Coincheck has finally been given the green light to ramp up its operations by the Japanese Financial Services Authority (JFSA). Towards the end of December, Coincheck hinted that the JFSA was in the final stages of vetting its application for regulation and it’s now apparent that Coincheck has put in a lot of work to change and upgrade itself following the massive hack. Coincheck rejoins a highly exclusive list of crypto exchanges bearing the JFSA’s stamp of approval.
Tight Controls Put in Place
As part of its licensing agreement with the JFSA, Coincheck has been required to implement a stringent know your customer (KYC) process along with multiple passwords before any transactions can take place. On top of this, privacy-focused cryptos will not be available on Coincheck, including Dash, Monero, ZCash, and Verge. While this limited offering might put some traders off using the platform, it’s a better deal than not being able to operate entirely. In due time, the JFSA might relax these regulations slightly, but it’s unclear when this could happen.
New Wave of Regulations for Japan
At the end of 2018, the JFSA teased a set of amendments to its crypto regulations. The draft framework and regulations hint at greater protection for traders and enhanced security measures put in place to prevent hacks. Since the draft was published, more than 190 crypto related firms applied to be regulated. These firms suddenly flocking to get regulated are looking to get in before these new regulations come into effect, as afterwards it will become a lot harder to get the JFSA’s stamp of approval.
South Korea Releases Security Audit Results
Just across the water, the South Korean government recently announced the results of a security audit on 21 crypto exchanges in the country. 14 of these exchanges failed the security audit and are allegedly vulnerable to a whole manner of attacks. The JFSA could be looking to implement a similar annual audit of the crypto exchanges registered in Japan in its new crypto regulation reforms – a move that would further enhance the country’s reputation for having the most secure crypto exchanges.
This is great news for Coincheck, as they can finally get back to business after waiting for so long in the shadows. We can expect crypto trade volumes in Japan to increase in the coming days off the back of this news. However, it could be some time before Coincheck is jostling for a position in the top five crypto exchanges by 24-hour trade volume.