Crypto Traders Files Lawsuit Against Coincheck Over Freezing of Digital Currency
Crypto Traders Files Lawsuit Against Coincheck Over Freezing of Digital Currency.
Japanese Coin-check traders is taking the crypto exchange company to court on Thursday, February 15, over the company’s refusal to allow withdrawals.
The crypto exchange coincheck was hacked last month, Jan. 27, which resulted to the company losing $530 million. After the hack, the exchange froze all withdrawals, explaining it had to suspend trading to confirm the safety of its platform.
Plaintiff attorney Hiromu Mochizuki told Reuters that the petition will require Coincheck to allow traders to remove their crypto into a non-Exchange portfolio, and that a second hacking lawsuit might occur. He tweeted that since coincheck began allowing withdrawals, one of the four claims has been settled.
Coincheck allowed users to withdraw funds yesterday, Feb 13, while noting it would place restrictions on withdrawals until it has ensured a safer security system for its operations.
The Financial Services Agency of Japan (FSA) conducted an inspection of Coincheck on February 2 prior to the February 13 deadline to submit a report on the crypto hack and how to upgrade its security to prevent a Similar event. All cryptographic exchanges in Japan must also submit a risk management report to the FSA.
Japan is at the forefront of governments that accept cryptocurrencies. The country recognized Bitcoin as a legal payment method in April 2017 and actively regulated the market by controlling the issuance of cryptocurrency swap licenses since September 2017.
The coincheck Hack has become the largest crypto hack that has occurred in Japan since the notorious 2014 Mt. Gox Hack when about $480 million disappeared from the Japanese exchange market. The country has adopted cryptocurrency and its regulations after the Mt. Gox hack.