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Hacked Crypto Exchange Coincheck To Be Sued By Merchants For Freezing Funds

According to the Reuters’ report, today, Feb. 13, 10 cryptocurrency merchants will file a lawsuit at the Tokyo District Court on Thursday, Feb. 15, against crypto exchange Coincheck over the company’s freezing of crypto withdrawals.

Japan-based exchange had frozen all withdrawals after they lost over $530 mln in NEM in a hack last month.

The claimant’s jurist, Hiromu Mochizuki, told Reuters that the complaint will ask Coincheck to allow the merchants to withdraw their crypto into a wallet outside of the exchange, and that a second lawsuit over damages resulting from the hack may be forthcoming.

Mochizuki wrote yesterday, Feb. 12, that since Coincheck began allowing yen withdrawals, 1 of the 4 complaints has been resolved:

Coincheck had declared Jan. 27, the day after the hack, that they planned on refunding their clients that were affected by the loss of NEM.

Japan’s Financial Services Agency (FSA) carried out a control of Coincheck on Feb. 2, ahead of the Feb. 13 deadline for the exchange to submit a report on the hack and how they will change their security system to prevent similar situations in the future. All crypto exchanges in Japan must also now supply a risk management report to the FSA.

Japan has been on the frontline of governments that are accepting of cryptocurrencies. The country recognized Bitcoin as a legal payment way in April 2017, and has been actively regulating the market by controlling the edition of cryptocurrency exchange licenses since September, 2017.

The country’s hug of both crypto and crypto regulation may be considered as a reply to the infamous 2014 another Mt. Gox hack, when over $480 mln went missing from the now-defunct Japan-based exchange. The Coincheck hack is now the biggest crypto hack to have occured since Mt. Gox.