Embattled Crypto Exchange Coincheck Eyes Comeback with US Expansion

The new owner of the platform, Monex Group, sees a favorable crypto environment forming in the West

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21 May • 3 min
In News

Japan-based online trading services provider Monex Group considers expanding the operations of hacked cryptocurrency exchange Coincheck into the US, CEO Oki Matsumoto told Bloomberg in an interview on Friday. Monex bought Coincheck for JPY 3.6 billion (USD 33.6 million) in April, three months after USD 530 million worth of customer NEM tokens were stolen from the platform.

Matsumoto said he expects Coincheck will receive an official license from Japanese authorities in June, but declined to specify a timeline for the platform’s move to America.

The former Goldman Sachs partner believes a US expansion could help Coincheck once again become a major player in the industry. “We can broaden our customer base at Coincheck. In the end, we should and we can replicate the profitability they achieved before,” he stated.

Prior to the theft, Coincheck was reporting high profits, earning JPY 52.2billion (USD 469 million) from April 2017 through January 2018. According to data compiled by jpbitcoin.com and Bloomberg, the exchange’s turnover in April was about 95 percent lower than in December — the exchange’s busiest-ever month — after the hack spooked clients and cryptocurrency prices tumbled.


Figures released by Monex earlier this month showed, however, that despite the hit and the subsequent JPY 47.3 billion writedown that Coincheck issued as a refund to affected customers, the exchange still closed the fiscal year in the green, netting JPY 6.3 billion pre-tax profit.


A Favorable Crypto Environment Forming in The West

The planned US expansion is apparently not just part of Monex’s strategy to bring Coincheck back to the prime crypto market. Matsumoto noted that though Japan has a fame for being a cryptocurrency-friendly nation — the country was the first to recognize Bitcoin as a form of legal tender back in 2016 — it lags behind different jurisdictions in clarifying the regulatory standing of cryptocurrencies.

“Japan may seem like it’s one step ahead in crypto, but in terms of deciding what’s a security or a token and attracting institutional investors, the US and Europe are moving ahead,” Matsumoto said. A clear set of rules, even on the stricter side, can entice investors to invest freely into cryptocurrencies without fearing a sudden shutdown of crypto businesses, he added.

Matsumoto sees a favorable crypto environment forming in western countries, including lower taxes and growing interest from institutional money managers. He compared Japan’s hefty 55 percent levy on crypto with France’s recent initiative to lower the capital gains tax rate by more than half to 19 percent.

“At that level, it’s hard to even think of crypto as something you’d put in your portfolio,” Matsumoto said of Japan’s tax. “That means it’ll just remain a plaything for speculators.”

The CEO further argued that US federal regulators now wield the biggest influence on deciding the future status of crypto in the world economy, referring to the ongoing debate as to whether digital assets should be regulated as securities, commodities or some other type of asset class. An eventual decision would provide much-needed clarity for the emerging industry, and ultimately foster growth and institutional investor confidence, Matsumoto told Bloomberg.