Japan Raps Coincheck Orders Broader Checks After 530 Million Cryptocurrency Theft | The News Amed
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Japan Raps Coincheck Orders Broader Checks After 530 Million Cryptocurrency Theft

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TOKYO – Japan’s financial regulator said on Monday it would inspect all cryptocurrency exchanges and ordered Coincheck to get its act together after hackers stole $530 million worth of digital money from its exchange in one of the biggest cyber heists on record.

The theft highlights the vulnerabilities in trading an asset that global policymakers are struggling to regulate and the broader risks for Japan as it aims to leverage the fintech industry to stimulate economic growth.

The Financial Services Agency (FSA) on Monday ordered improvements to operations at Tokyo-based Coincheck, which on Friday suspended trading in all cryptocurrencies except bitcoin after hackers stole 58 billion yen ($534 million) of NEM coins, among the most popular digital currencies in the world.

Coincheck said on Sunday it would return about 90 percent with internal funds, though it has yet to figure out how or when.

The NEM coins were stored in a “hot wallet” instead of the more secure “cold wallet”, outside the internet, Coincheck said. It also does not use an extra layer of security known as a multi-signature system.

The FSA said it ordered Coincheck to submit an incident report and measures for preventing a recurrence by Feb. 13.

If necessary, it will conduct on-site inspections of other exchanges, an official told a briefing.

The regulator said it has yet to confirm whether Coincheck had sufficient funds for the reimbursement.

Japan started to require cryptocurrency exchange operators to register with the government only in April 2017, allowing pre-existing operators such as Coincheck to continue offering services ahead of formal registration.

The FSA has registered 16 cryptocurrency exchanges so far, and another 16 or so are still awaiting clearance. Coincheck’s application was made in September.

“It’s been long said that cryptocurrencies are a solid system but cryptocurrency exchanges are not,” said Makoto Sakuma, research fellow at NLI Research Institute.

“This incident showed that the problem has not been solved at all. If Coincheck screws up its crisis management, that could deal a blow to the current cryptocurrency fever.”

NEM fell to $0.78 from $1.01 on Friday but recovered to $0.97 on Monday, according to CoinMarketCap. Crypto-currency related shares mostly rose in Tokyo, with GMO Internet, which offers cryptocurrency exchange service, gaining 5.7 pct.

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Singapore-based NEM Foundation said it had a tracing system on the NEM blockchain and that it had “a full account” of all of Coincheck’s lost NEM coins. It added that the hacker had not moved any of the funds to any exchange or personal accounts but that it had no way to return the stolen funds to its owners.

In 2014, Tokyo-based Mt. Gox, which once handled 80 percent of the world’s bitcoin trades, filed for bankruptcy after losing around half a billion dollars worth of bitcoins. More recently, South Korean cryptocurrency exchange Youbit last month shut down and filed for bankruptcy after being hacked twice last year.

World leaders meeting in Davos last week issued fresh warnings about the dangers of cryptocurrencies, with U.S. Treasury Secretary Steven Mnuchin relating Washington’s concern about the money being used for illicit activity.

Many countries have clamped down on exchanges.

South Korea will ban cryptocurrency traders from using anonymous bank accounts to crack down on the criminal use of virtual coins. China has ordered some exchanges to close, with the aim of containing financial risks.

But Japan has taken a different tack, becoming last year the first country to introduce national-level regulation of cryptocurrency exchanges.

The move, intended to protect consumers and stymie money laundering, was praised by many traders and operators as progressive.

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Japans Rakuten To Acquire Asahi Fire For 45 Billion Yen

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TOKYO – Japanese e-commerce company Rakuten Inc said on Monday it would acquire Asahi Fire & Marine Insurance Co Ltd for 45 billion yen ($413.6 million), its latest move to diversify beyond its online shopping site.

Rakuten said it would launch a tender offer and pay 2,664 yen per share of Asahi Fire, a property insurance firm owned by Nomura Holdings and its subsidiary. Nomura confirmed the tender offer in a separate statement.

Reporting by Minami Funakoshi;

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Google Says Invests In Indonesian Ride-hailing Firm Go-jek

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SINGAPORE – Google has invested in Indonesian ride-hailing firm Go-Jek, as part of its strategy to support and participate in the growth of Indonesia’s internet economy, Caesar Sengupta, a vice president at Google said in a company blog.

“This investment lets us partner with a great local champion in Indonesia’s flourishing startup ecosystem, while also deepening our commitment to Indonesia’s internet economy,” Sengupta said in a post titled “Investing in Indonesia.” bit.ly/2nmqPAf

This month, sources told Reuters that Alphabet’s Google, Singapore state investor Temasek and others were investing in Go-Jek as part of a $1.2 billion fundraising round, bolstering the Indonesian start-up in its battle with deep-pocketed rivals Grab and Uber.

Reporting by Anshuman Daga;

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Facebook Makes Privacy Push Ahead Of Strict Eu Law

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BRUSSELS – Facebook (FB.O) said on Monday it was publishing its privacy principles for the first time and rolling out educational videos to help users control who has access to their information, as it prepares for the start of a tough new EU data protection law.

The videos will show users how to manage the data that Facebook uses to show them ads, how to delete old posts, and what happens to the data when they delete their account, Erin Egan, chief privacy officer at Facebook, said in a blog post.

Facebook, which has more than 2 billion users worldwide, said it had never before published the principles, which are its rules on how the company handles users’ information.

Monday’s announcements are a sign of its efforts to get ready before the European Union’s General Data Protection Regulation (GDPR) enters into force on May 25, marking the biggest overhaul of personal data privacy rules since the birth of the internet.

Under GDPR, companies will be required to report data breaches within 72 hours, as well as to allow customers to export their data and delete it.

Facebook’s privacy principles, which are separate from the user terms and conditions that are agreed when someone opens an account, range from giving users control of their privacy, to building privacy features into Facebook products from the outset, to users owning the information they share.

“We recognize that people use Facebook to connect, but not everyone wants to share everything with everyone – including with us. It’s important that you have choices when it comes to how your data is used,” Egan wrote.

Also among the company’s privacy principles are helping users understand how their data is used, keeping that information secure, constantly improving new controls, and being accountable to regulators.

“We put products through rigorous data security testing. We also meet with regulators, legislators and privacy experts around the world to get input on our data practices and policies,” the blog post said.

The company’s Chief Operating Officer Sheryl Sandberg announced last week that Facebook would be creating a new privacy center which would put the social network’s key privacy settings in one place.

The GDPR drastically increases the level of fines for companies found to be in breach of data protection law, potentially rising as high as 4 percent of global annual turnover or 20 million euros, whichever is higher.

Facebook has faced probes from EU regulators over its use of user data and tracking of online activities.

As of Monday, users will be reminded by their News Feeds to take a “privacy checkup,” Egan wrote in his blog, to ensure they are comfortable about what data they are sharing, and with whom.

Reporting by Julia Fioretti;

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