Japanese cryptocurrency exchange Coincheck, which sustained a $534 million USD hack last January, has decided to stop offering leveraged trades of cryptocurrencies on its platform.
“Coincheck has decided to end the “leverage transaction” service on Friday, March 13, 2020…If you have a current position, we would like to ask you to settle all positions by the deadline and transfer the Japanese yen balance in Coincheck’s leverage account to your trading account.”
The exchange does not explain in the announcement why it is ending the service.
In September, however, Coincheck suspended new orders for margin trading and said it planned to reduce margins on pending trades from 5X to 4X on October 31st, 2019.
Coincheck stated at the time that the changes were being made, “based on the self-regulation rules and guidelines established by the Japan Virtual Currency Exchange Association.”
The Japan Virtual Currency Exchange Association has been working very closely in recent months with Japan’s Financial Services Authority, which recently ordered the country’s crypto firms to ensure they understand revised laws pertaining to the sector.
In June, Japan hosted G20 meetings where Finance Ministers from the world’s 20 most powerful economies, where participants, “…reaffirm(ed) (their) commitment to applying…recently amended FATF Standards to virtual assets and related providers for AML (anti-money laundering) and CFT (anti-terrorist finance).”
Shortly thereafter, an anonymous source from the Japanese government told Reuters that Japan’s regulators and experts had volunteered to spearhead the creation of a new, regulated global network for cryptocurrency transfers and trades similar to SWIFT.
The source said the system should launch within a few years.
In June, an American cybersecurity expert told Japanese media outlet Asahi Shinbun that viruses “first marketed in a Russian bulletin board in June 2011” were found on computers of employees at Coincheck after it was hacked.
“From the analysis of the virus, Eastern Europe and Russia may be related to the server criminal group,” the expert claimed.
South Korean intelligence had previously believed that a North Korean hacker group called Lazarus was responsible for the Coincheck hack.
The $534 million USD hack of mostly NEM cryptocoins brought operations at Coincheck under the close scrutiny of Japan’s financial watchdogs.