About a year after a massive digital heist that shocked the cryptocurrency industry around the world, Japan’s financial watchdog gave Coincheck Inc. the green light Friday to officially run a virtual currency exchange.
Following the Coincheck hacking case in late January that cost the Tokyo-based startup ¥58 billion worth of NEM coins, the Financial Services Agency began inspecting other exchanges, stalling the approval process for newcomers. No new operators were given the OK last year as a result.
With Coincheck gaining permission, the FSA will likely proceed with the examination process for other companies. The watchdog has said about 190 firms have shown interest in the exchange business.
Virtual currency exchanges are not allowed to operate without registering with the FSA. Those including Coincheck that had been in business before the new regulation took effect in April 2017 were only allowed to operate on a tentative basis.
After the Coincheck hack, the FSA ordered Coincheck to improve its management, security and internal controls.
“The managerial environment of the cryptocurrency industry changes rapidly. We must make unceasing efforts to improve security and internal control,” Coincheck CEO Toshihiko Katsuya told a news conference Friday.
Last April, Monex Group Inc., a major online brokerage, announced plans to acquire Coincheck as it believes crypto-based businesses will be a driver of growth in the future.
The Monex group has been running its online financial business since 1999, so it claims to have a plenty of know-how and experience building robust security systems and inner management that it can share with Coincheck.
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It has been over a year since Japan’s Financial Services Agency last approved a cryptocurrency exchange to legally operate in the country. Coincheck, which was hacked early last year, has become the 17th fully-registered crypto exchange in the country. The exchange has made numerous improvements after it was acquired by Monex Group.
FSA Finally Approves Coincheck
Japan’s top financial regulator, the Financial Services Agency (FSA), announced on Friday that it has approved the registration of Coincheck as a cryptocurrency exchange. Under the country’s Payment Service Act, all crypto exchanges must register with the FSA.
The exchange’s parent company, Monex Group, also issued a press release on Friday with registration details. The announcement reads:
Coincheck Inc … announced today that it has registered with the Kanto Financial Bureau as a cryptocurrency exchange agency in accordance with the Payment Service Act, effective January 11, 2019.
According to the FSA’s website, Coincheck handles nine cryptocurrencies: BTC, ETH, ETC, LSK, FCT, XRP, XEM, LTC, and BCH.
After it was hacked in January last year, Coincheck suspended certain services “to focus on enhancing governance and internal controls by developing business improvement plans and carrying them out,” the company explained. On Nov. 26, services for tradable cryptocurrencies were resumed including depositing, remitting, purchasing and selling.
Coincheck originally applied for registration with the FSA in September 2017. While the regulator approved 16 crypto exchanges throughout that year, it continued to evaluate Coincheck. The exchange was classified as a deemed dealer, which means it was allowed to operate while the FSA reviewed its application.
Needed Improvements Made
In Friday’s announcement, Coincheck outlined six areas it had addressed in order to comply with the FSA’s registration requirements. The exchange has “improved governance fundamentally,” “revisited the business strategy and ensured customer protection,” “strengthened governance control by the board,” “clarified risks on cryptocurrencies being offered by the company,” “implemented measures on anti-money laundering (AML) and countering the finance of terrorism (CFT),” and “revised organizational structure to ensure validity.”
Monex Group made an announcement on Dec. 25, explaining to investors that neither it nor Coincheck offers “cryptocurrency mining-related business including cryptocurrency mining itself.” This clarification followed the announcements by GMO Internet and DMM.com regarding their own mining operations. GMO Internet said it will no longer develop, manufacture, and sell mining machines. DMM.com is reportedly exiting the cryptocurrency mining business altogether.
Furthermore, the company assured investors that it “does not conduct cryptocurrency transactions on its own account,” adding:
Coincheck Inc. does conduct cover transactions with domestic and overseas cryptocurrency exchanges speedily for the positions that resulted from the selling and buying transactions with customers.
The approval of Coincheck comes more than a year after the last cryptocurrency exchange, Bitocean, was approved by the FSA on Dec. 26, 2017. The hack of Coincheck in January prompted the agency to slow down the rate of approvals and began tightening its oversight of crypto exchanges, forcing 13 out of 16 deemed dealers to exit the market. Nonetheless, the FSA told news.Bitcoin.com at the end of last year that more than 190 crypto exchange operators have expressed their intention of market entry.
What do you think of the Japanese regulator finally granting registration to Coincheck? Let us know in the comments section below.
Images courtesy of Shutterstock and Coincheck.
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TOKYO and PLANTATION, Fla. and HONG KONG, Dec. 19, 2018 /PRNewswire/ — TradeStation, a Monex Group company (Monex Group, Inc. is listed on the first section of the Tokyo Stock Exchange, code: 8698) and award-winning* broker-dealer and futures commission merchant, today announced the results of the “Monex Global Retail Investor Survey, Vol. 26.” The survey found that U.S. investors who use the TradeStation analysis and trading platform continue to temper their expectations for the global and U.S. equities market entering 2019.
Results of the recently conducted online survey show that U.S. investors remain generally positive in their outlook for the global equities markets, though expectations have diminished significantly from a year ago. Of U.S. survey respondents, 41% said they expect global stocks to further advance in the next three months – nearly identical to the 42% in the last survey in June 2018 but well below the 62% result one year ago in December 2017. Nearly one-third (31%) of investors expect global equities to decline over the next three months, up from 24% in June 2018 and just 14% in December 2017.
When asked about their expectations for the U.S. equities market over the next three months, U.S. investors remain bullish. Nearly three in four (74%) say they expect U.S. stocks to outperform their counterparts in Europe/U.K., Asia (excluding Japan) and Japan, little changed from 71% in the June 2018 survey. Expectations for the U.S. economy and U.S. dollar, however, sharply diverged. Just 40% of survey respondents expect the U.S. economy to improve in 2019 – down from 65% just six months ago – while 63% expect the U.S. dollar to strengthen against the other major currencies, up from 58% in June. Fully half (50%) of U.S. investors said they expect the Federal Reserve to take further action at its meeting this month.
When asked about expectations for their own trading activity over the next 12 months, 51% said they expect their own trading volume to increase in 2019, compared to 54% six months ago; only 8% say they are likely to curtail their trading activity.
“The survey results show that despite growing concerns about the domestic economy, U.S. investors remain committed to traditional equities markets,” said John Bartleman, President of TradeStation Group, Inc. “TradeStation in turn remains committed to giving active traders and investors the tools they need to take advantage of opportunities in the increasingly volatile financial markets.”
In other survey results:
- When asked about which industry sectors would provide attractive opportunities over the next three months, strong majorities of U.S. investors cited healthcare (74%) and consumer goods (65%).
- Investors remain divided in their perceptions of Bitcoin and other cryptocurrencies. Sixty-five percent said they have no interest in virtual currency, up from 53% six months ago. The percentage of respondents who said they already have invested in virtual currency (16%) was virtually unchanged from six months ago (17%), but up from 11% in December 2017.
- In follow-up questions about cryptocurrency, 50% of investors expect virtual currency to increase its presence in the future, compared to 40% who do not. Of those expecting crypto to have a larger footprint in the future, fully 61% cited the groundbreaking nature of blockchain technology.
Monex has been conducting its monthly retail investor survey with its Japanese clients since October 2009. The “Monex Global Retail Investor Survey,” covering retail clients in Japan, Hong Kong and the U.S., was launched in June 2011. Please refer to the full report for complete results.
The Monex Global Retail Investor Survey measures customer sentiment based upon answers to specific questions received from a random sampling of customers of Monex, Inc., TradeStation Securities, Inc., and Monex Boom Securities (H.K.) Ltd. Details of the methodology used to conduct the survey are available upon request. Accuracy and completeness of the data derived from the survey is not guaranteed.
The information contained herein should not be construed as investment research or an offer or solicitation to buy or sell securities, securities derivatives or futures products or services. Investor sentiment derived from the survey responses is no guarantee of future performance or success.
Active trading regardless of asset class (equities, options, futures) carries a high level of risk and may not be suitable for all investors. Relevant risk disclosures are available at www.tradestation.com.
About Monex Group, Inc.
Monex Group, Inc., listed in the Tokyo Stock Exchange (security code: 8698), has grown to become a major online financial institution that operates retail online brokerages in Japan, the U.S., China (including Hong Kong) and Australia. In addition, Monex offers business services in international forex, asset management, investor education and M&A advisory.
Monex Group aims to create a new type of financial group for a new era. At its core, Monex will offer crypto asset banking operations and online brokerage services that link the world’s financial markets by bringing together Coincheck’s cryptocurrency trading, storage and payment capabilities with the expertise and technology of our online brokerage operations in Japan, the U.S., China and Australia.
About TradeStation Group, Inc.
TradeStation Group, Inc., through its principal operating subsidiary, TradeStation Securities, Inc., offers the TradeStation analysis and trading platform to the active trader and certain institutional trader markets. The TradeStation platform offers electronic order execution and enables clients to design, test, optimize, monitor and automate their own custom equities, options and futures trading strategies. TradeStation Group is a wholly owned subsidiary of Monex Group, Inc., one of the largest online financial services providers in Japan.
* Visit TradeStation.com/Awards for more information.
TradeStation Securities, Inc. (Member NYSE, FINRA, CME, SIPC NSCC, DTC & OCC) is a licensed securities broker-dealer and a registered futures commission merchant (FCM), and a member of the major stock, options and futures exchanges in the United States. The company’s technology subsidiary, TradeStation Technologies, Inc., develops and offers strategy trading software tools and subscription services, and hosts the TradingApp® Store.
About Monex Boom Securities (H.K.) Limited
Monex Boom Securities (H.K.) Limited (“BOOM”) offers multi-market and multi-currency online securities trading services to investors all around the world. With BOOM’s proprietary web-based trading platform, investors can trade equities in all major exchanges and manage different major currencies via one single account. Currently, it offers access to securities listed on over 17 stock markets in 12 countries. In addition, BOOM also develops trading solutions for other financial institutions.
Being the first company to launch Internet stock trading in Asia/Pacific, BOOM introduced a new pattern of self-directed cross-border investment by applying new technology to traditional equities trading and financial services. BOOM aims to provide retail investors with PRIVATE, EASE, SPEEDINESS and INEXPENSIVE international stock trading services.
BOOM is a fully licensed Broker / Dealer regulated by the Securities and Futures Commission (SFC) of Hong Kong, founded in 1997 and headquartered in Hong Kong. It is a wholly owned subsidiary of Monex Group, one of the largest online financial services providers in Japan.
SOURCE TradeStation Group, Inc.
Japanese cryptocurrency exchange Coincheck’s parent company, Monex Group, announced that they will be launching a cryptocurrency exchange in the United States of America. Apart from that the company also revealed about their expansion plans for Coincheck. This will be done through Monex Group’s subsidiary, Tradestation, which is based in the USA and offers online electronic brokerage services to individual and institutional traders.
This development was discussed when Monex Group held a business strategy briefing session, earlier this week, to outline its U.S. expansion plan, news portal The Bitcoin News reported. The Chief Executive Officer (CEO) of Monex Group Oki Matsumoto, who was at the meeting said, “plans to offer virtual currency transactions … in the first quarter of 2019.”
Concurring with that, the CEO of Tradestation John Bartleman, said, “For cryptocurrency business, we have been preparing the virtual currency service in the U.S. for the past several months. We believe it can start in the first quarter of 2019.”
Matsumoto revealed his plans of registering CoinCheck as a cryptocurrency operator with Financial Services Agency (FSA). The news portal quoted him as saying, “We have been consulting with the Financial Services Agency,” and added that Coincheck had resumed its business last month.
For the uninitiated, Monex Group had acquired Coincheck, a few months after it reported a hack in its servers and cryptocurrency NEM worth million missing. At the time Coincheck confirmed that they had been acquired by financial services firm, Monex in April. According to a report in Nikkei Asian Review, the exchange reshuffled its management to earn the trust of the CEO of Monex, Toshihiko Katsuya who will take over as the new president.
It had also announced that it would refund the stolen money. At the time it had said, “Coin Check Co., Ltd. today announced that it submitted a plan for business improvement order received from the Financial Services Agency on March 8, 2018, in connection with the unauthorized remittance of virtual currency NEM due to unauthorized access that occurred so far I will report.”
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