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Hacked Exchange Coincheck To Be Sued By Traders For Freezing Funds

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Crypto traders are due to file a lawsuit Thursday against hacked crypto exchange Coincheck after the company froze crypto withdrawals

Ten cryptocurrency traders will file a lawsuit at the Tokyo District Court on Thursday, Feb. 15, against crypto exchange Coincheck over the company’s freezing of crypto withdrawals, Reuters reported today, Feb. 13.

The Japan-based exchange had frozen all withdrawals after they lost $530 mln in NEM in a hack last month.

The plaintiffs’ lawyer, Hiromu Mochizuki, told Reuters that the claim will ask Coincheck to allow the traders to withdraw their crypto into a wallet outside of the exchange, and that a second lawsuit over damages resulting from the hack may be forthcoming.

Mochizuki tweeted yesterday, Feb. 12, that since Coincheck began allowing yen withdrawals, one of the four claims has been settled:

Coincheck had announced Jan. 27, the day after the hack, that they planned on refunding their customers that were affected by the loss of NEM.

Japan’s Financial Services Agency (FSA) conducted an inspection of Coincheck on Feb. 2, ahead of the Feb. 13 deadline for the exchange to submit a report on the hack and how they will change their security to prevent a similar event in the future. All crypto exchanges in Japan must also now submit a risk management report to the FSA.

Japan has been at the forefront of governments that are accepting of cryptocurrencies. The country recognized Bitcoin as a legal payment method in April 2017, and has been actively regulating the market by controlling the issuance of cryptocurrency exchange licenses since September, 2017.

The country’s embrace of both crypto and crypto regulation may be seen as a response to the infamous 2014 another Mt. Gox hack, when around $480 mln went missing from the now-defunct Japan-based exchange. The Coincheck hack is now the largest crypto hack to have taken place since Mt. Gox.

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