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Japan's Finance Minister called for cryptocurrency trading to strengthen its position and standards cybersecurity based on the exchange.
Speaking to reporters Tuesday after a cabinet meeting, Japanese Finance Minister Taro Aso demanded the strengthening of cryptocurrency trading systems, while urging regulators to "monitor appropriately" "the ecosystem to protect consumers.
"It was a big regret that illegal access caused a huge cryptocurrency spill on the part of Coincheck on Friday," Aso told reporters, according to a Reuters report.
"The Financial Services Agency [Japan’s financial regulator] must appropriately monitor cryptocurrency traders to protect users.We will appropriately weigh the balance between the promotion of innovation and the protection of users in cryptocurrency (supervisor).
Aso, who is also Japan's Minister of Financial Services, has already criticized the excessive regulation of cryptocurrencies.
The finance minister's remarks follow FSA's own statement Monday when the regulator revealed that it would investigate all cryptocurrency trading, including the possibility of on-site inspections. The FSA has also ordered Coincheck to improve its cybersecurity standards.
As previously reported, Coincheck executives admitted to storing funds in their portfolios, which was eventually compromised. Hot wallets are susceptible to unauthorized access, unlike cold wallets that are secure and kept offline. "It has been difficult for us to manage cold portfolios," said Coincheck chairman Koichiro Wada at a press conference following the "hacking," noting "technical reasons and a lack of staff . "
Coincheck also stored the 500 million NEM tokens in a hot wallet without multi-sig security, further highlighting its failures as custodian of customers' cryptocurrencies.
On Monday, Japan's leading financial diplomat, Masatsugu Asakawa, revealed that the regulation of cryptocurrency "should be discussed between the finance ministers and central bankers of the G20 countries in Argentina at the March meeting of this year.
Image from Shutterstock.
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