Crypto Traders File Lawsuit Against Coincheck to Restart Withdrawals

Cryptocurrency investors launched a lawsuit against Coincheck today for freezing asset withdrawals following last month’s hack that saw the theft of millions of dollars of digital currency.

A group of seven traders filed an initial suit at the Tokyo District Court, according to the plaintiffs’ lawyer Hiromu Mochizuki, reports Japan Today. They are seeking the reimbursement of frozen assets amounting to 19.5 million yen ($182,910).

Investors are also planning to file a second lawsuit against Coincheck on the 27th February to account for any value lost in their coins frozen by the Japanese exchange, in addition to other damages resulting from withdrawal curbs, Mochizuki added.

Last month, it was reported that Coincheck had abruptly halted services giving rise to the fear that it had been hacked. This was later confirmed, resulting in the theft of $530 million worth of NEM, and making it one of the largest hacks of its kind. As a result, Japan’s financial watchdog, the Financial Services Agency (FSA) conducted on-site inspections of the exchange after handing it a business improvement order.

Following the hack, Coincheck vowed that it would reimburse 260,000 holders of NEM coins amounting to 46 billion yen ($431 million). This is despite Japanese authorities questioning whether the exchange had enough funds to cover the theft.

On Tuesday, users of the exchange were permitted to withdraw yen for the first time, totalling 40.1 billion yen ($373 million). However, while it has resumed yen withdrawals it has yet to do the same for cryptocurrency assets leaving those with funds in the exchange unable to do anything.


“Plaintiffs are demanding Coincheck return their cryptocurrencies – 13 different kinds including NEM,” said Mochizuki.

In addition to demanding the reimbursement of the digital currency, the investors are calling for an annualised interest of five percent on the value of the coins while withdrawals have been halted until they resume again.

According to a court file, the investors assets had fallen 31.3 percent in value, or 8.9 million yen, between the heist and Tuesday.

Aside from the lawsuits Coincheck submitted their report to the FSA on Tuesday to explain how the hack happened, what support will be in place for customers, and the measures it will implement to prevent future hacks.

The FSA will determine the report and decide whether it will grant Coincheck a licence to continue operating. Prior to the hack it was allowed to operate without one.