Monex confirms interest in acquiring hacked cryptocurrency exchange Coincheck

Regulators would likely be very interested in a potential buyout due to a hack leading to over $500 million in lost funds.

Cryptocurrency crackdown in Japan after heist worth $530 million Coincheck has been ordered by Japan's financial regulator to get its act together after hackers stole $530 million worth of digital money from its exchange.

Monex has confirmed interest in purchasing Coincheck but insists nothing is yet set in stone.

On Monday, the online Japanese broker said in a statement (.PDF) that Monex has been "studying and experimenting" with blockchain technologies as the firm considers the creation of new finance-related businesses, infrastructures, and technologies as important.

As a result, Monex is considering a potential Coincheck buyout but is yet to ink a formal offer.

"The company name "Monex" symbolizes our business principles -- always a step ahead of the "Y" in "Money" to design and provide approaches to money in a new era," Monex said. "It is true that we have been considering the acquisition of the cryptocurrency firm [...] but have not made any decision yet."

Monex could potentially offer up to several billion yen for a majority stake in Coincheck, a Japanese cryptocurrency exchange which deals primarily in Bitcoin (BTC).

Nikkei reported earlier this week that should a deal be agreed -- potentially as early as this week -- the broker intends to install a new management team for the Tokyo-based exchange and keep the service under its direct supervision.

"Moving forward, should there be facts determined by Monex Group, Inc. that need to be disclosed, we will do so in a timely and appropriate manner," Monex said.

A potential rescue effort cannot come soon enough. Registrations on the exchange are currently closed as Coincheck has found it difficult to recover from a cyberattack which left the service $530 million out of pocket.

In January, Japan's financial regulator, the Financial Services Agency (FSA), ordered Coincheck to make improvements including the establishment of anti-money laundering protocols and the enhanced protection of customer funds.

While the lost funds -- 58 billion yen in NEM coins stored in a hot wallet -- have been traced, there is no way to return them to their owners.

Coincheck has insisted that it will reimburse the majority of the stolen cryptocurrency but has not revealed how this will be made possible.

"We would like to offer our sincerest apologies to our customers, other exchanges, and everyone else affected by the illicit transfer of NEM which occurred on our platform," Coincheck says.

"We vow to take action on all of the points listed in the business improvement order handed down from the Financial Services Agency as we work towards resuming normal business operations."

See also: What we can expect from future cryptocurrency regulation worldwide

Japan now requires cryptocurrency exchanges to register with the FSA. However, those operating before April 2017 were not required to cease operation during compliance checks and before registration was approved -- including Coincheck.

According to Nikkei, both companies are seeking approval for a potential deal.

Should the acquisition be approved and go forward, Coincheck may be thrown a lifeline to re-establish itself in light of the cyberattack. In return, Monex will be given a means to enter the cryptocurrency space and will also be adopting current customers of the exchange.

Previous and related coverage