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Monex finalizes acquisition of troubled Coincheck

Coincheck, which was hit by a cryptocurrency theft in January this year, becomes a fully owned subsidiary of Monex.

Online trading services provider Monex Group, Inc. (TYO:8698) has earlier today announced the completion of the acquisition of 100% of the shares of troubled virtual currency exchange Coincheck, Inc.

On April 6, 2018, the broker confirmed earlier media reports that it would buy the Exchange, which was hit by a virtual currency theft in January 2018. The deal, which covers 1,775,267 shares in Coincheck, is valued at JPY 3.6 billion.

Monex has noted that Coincheck has received a business improvement order from the Japanese regulator concerning the theft of cryptocurrency, NEM, as a result of unauthorized access to its system on January 26, 2018. But the broker said it would aim to build a secure business environment for customers by fully backing up Coincheck’s enhancement process. In particular, Monex stated its intentions to maximize the use of its expertise and human resources of business administration, system risk management, and customer asset protection system.

The move is in line with “MONEX’s new beginning” strategy, presented in October last year. Back then, the broker promised a new beginning to its clients and investors via the development and adoption of new technologies.

The aim of the company is to utilize Blockchain technology in a way that would enable safe, low-cost transactions of a diverse range of financial products and money. Back then, Monex has also unveiled plans concerning virtual currencies, including the launch of a virtual currency exchange business by Monex, Inc. and operating a virtual currency exchange via start-up investment. The company has said it also plans to provide a virtual currency as a new trading item.

Whether Monex’s efforts will result in a turnaround for Coincheck remains to be seen.

The Coincheck “incident” has triggered a wave of action against other cryptocurrency exchanges in Japan. GMO Coin, the virtual currency business of GMO Internet Inc. (TYO:9449), got a business improvement order too, as the Japanese regulators voiced concerns about the system troubles occurring frequently as a result of the rapid expansion of the virtual currency exchange business. According to the regulator, the root cause analysis for these problems was inadequate and appropriate measures to avoid recurrence of the incidents were not taken.

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