A group of digital currency exchanges in Japan said Friday they will form a new organization to establish industry-wide standards for security and compliance.
The move, agreed between all 16 government-registered exchanges including bitFlyer Inc. and GMO Coin Inc., follows the massive Coincheck Inc. cryptocurrency heist earlier this year that raised new questions over the measures in place to protect such assets.
No name or launch date has yet been announced for the new organization, which will seek to be recognized as a regulatory body under the Payment Services Act, the exchanges said. It will also call on other exchanges that are awaiting government approval to join.
Until the Coincheck heist exchanges in the country had been split between two rival factions, with talks to form a unified industry body making little progress.
That changed after hackers stole ¥58 billion (about $543 million) worth of the cryptocurrency NEM from the unregistered Tokyo-based exchange in January — the largest cryptocurrency heist in history.
Coincheck is said to have kept the assets in a network-connected “hot wallet” rather than a disconnected “cold wallet,” which are more typically used in order to prevent security breaches.
The incident, which followed the 2014 theft of ¥48 billion in Bitcoin from the now-defunct Mt. Gox, triggered an industry-wide probe by the Financial Services Agency, Japan’s financial watchdog.
By forming a unified organization that is recognized by the government, the exchanges hope to improve business practices and ease customers’ concerns.
Police continue to investigate the whereabouts of the stolen NEM along with the perpetrators.
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