Japan Inspectors Raid CoinCheck Cryptocurrency Exchange Offices

Japan’s FSA raids CoinCheck offices following $500 million real time hack attack a week ago.

Japanese Financial Services (FSA) inspectors have raided the offices of cryptocurrency exchange CoinCheck, as the authorities aim to explore the response of the exchange to the $500 million real-time hack attack that took place a week ago.

The raid is the first ever at a cryptocurrency exchange in the country.

Inspectors said that their aim is to monitor the exchange’s response and investigate CoinCheck’s governance practices.

CoinCheck is still closed following the hack, and it is likely that the FSA gave the exchange a heads up before the raid, which put additional pressure on the exchange.

The FSA has also come under pressure for the CoinCheck case. For a long time, the regulator allowed the exchange to operate with a provisional license, putting the FSA under fire for the exchange’s loose information security.

Over 260,000 CoinCheck clients lost a total of 523 million XEM currency units, at a price of $0.81 per unit. The exchange said that it will reimburse its customers but there is still no word on when that will happen. It is also unclear how it will fund the missing $420 million to return it to clients, as all withdrawals are halted despite the fact that cryptocurrency prices have massively fallen in the past few days.

CoinCheck has been given time until February 13 to inform the FSA what exactly happened a week ago and how it will ensure the security of its clients. At this time, it is unclear whether the exchange has enough funds to fully reimburse its customers.

The FSA did not comment further, but ordered all cryptocurrency exchanges in the country to report any system risks. There are a total of 16 exchanges with full FSA authorizations to operate, while 16 other hold provisional licenses.