With more and more people dying to get involved with cryptocurrencies, there is a need to allow people to exchange their fiat money into cryptocurrency, especially with ease for newcomers. This is exactly the type of service that some companies have developed and integrated into the world.
This means that the company has sole control over what it does, rather than relinquish any control over which direction the company should go.
Another cryptocurrency exchange that shares similar popularity to Coinbase, is Coincheck.Coincheck was the unfortunate victim of a $500 million hack.
The Japanese government has taken this matter very seriously, causing the Japanese Financial Services Agency (FSA) to step in and take control of the situation immediately. The issue has escalated so much, that it has got to the point where some governments have taken the steps to effectively ban some exchanges. The issue that has plagued many of these exchange platforms is that they are in their own right, third parties. They establish a connection with a user and allow the user to initiate an exchange between fiat currency and cryptocurrency. Problems can arise because these third parties are not included within the blockchain network. In fact, blockchain technology works to remove any third party from these sorts of transactions. This leaves them open and vulnerable, making them targets for any malicious activity, such as a cyberattack. Coincheck had released a statement promising to pay back all 260,000 customers who had become victims of the hack but in the process lost 523 million units of XEM, which was priced at $0.81 at the time. Following the attack on the platform, Coincheck swiftly halted all withdrawals much to the dismay of users eager to react quickly to the dramatic falling prices of bitcoin and other cryptocurrencies. Amid rumored questions as to the return funds availability for Coincheck, the FSA in Japan has been working very closely with the company, engaging in a thorough investigation into the companyâs financial records. The crypto cyberattack has pushed the FSA to require all cryptocurrency exchanges in Japan to report all risks regarding their security. Consequently, nearly 20 exchanges have full authorization from the FSA to continue operating, whilst nearly 16 other crypto exchanges, currently only have a provisional license to operate. What is on everyoneâs minds right now is whether Coincheck are able to pay back their loyal customers. If they are unable to do so, then this could spell disaster for the crypto platform and could effectively drive everyone away to use different platforms.
*Please understand that the information on this site does not constitute financial advice in any way.
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