The Japanese cryptocurrency exchange known as Coincheck recently made a decision to drop three anonymous cryptocurrencies from its lineup of digital asset offerings. This decision is in majority due to the events that occurred in January, which resulted in losses of over $500 million for the exchange.
The Coincheck breach.
On January 26, 2018, about 523 million NEM coins were stolen from the exchanges hot wallet by means of unauthorized transactions. According to Coinchecks administrative team, the culprits managed to somehow gain access to the private keys for the wallet in which the NEM coins were being held. This allowed the thieves to drain over $500 million out of the exchange nearly effortlessly.
Shortly after the exchange break-in, Coincheck froze all withdrawals from its platform. Quite wild, but at the time, Coincheck reported that its security measures were definitely not at a low level.
Monero, Dash, and ZCash to be removed from Coincheck.
It is reported that Coincheck has received a notice from the Japanese Financial Services Agency (FSA) on March 8, requiring them to improve their business practices.
But why are Monero, Dash, and ZCash being removed? Well, due to the threat they pose. Due to the fact that the aforementioned currencies are totally anonymous, their use cases in illegal activities and money laundering has been on the rise steadily. Additionally, the decision to stop servicing these cryptocurrencies is also in part due to the notice received by Coincheck from the Japanese FSA.
What will be the aftermath of this?
Well, three of the biggest anonymous cryptocurrencies being removed from a decent exchange is definitely not great news. However, will the impact of this have substantial effects price wise? Probably not.
What is clear from this is that cryptocurrency exchanges don’t devote enough attention towards ensuring that their client’s assets are indeed safe. As well as general platform security, as was the case with Binance recently.