Monex considers rescuing Coincheck in massive buyout
Monex, the Japanese brokerage firm is considering buying out Coincheck, the Japanese crytocurrency exchange.
Coincheck has had a rough Q1, to say the least, after falling victim to the largest crypto heist in history.
An estimated $500 million worth of coins were stolen from the exchange in January of this year.
Monex may be offering as much as several billion yen for a majority stake in the Tokyo-based exchange, according to sources. The brokerage firm plans to install a new management team and restructure the exchange in its own image.
Coincheck heist: $500 million stolen
Coincheck said in January that cryptocurrency worth $530 million had been stolen in the biggest ever cryptocurrency heist in history.
Coincheck has since been seeking support from an external party.
The news of Monex’s potential takeover offer caused the price of bitcoin to rally about 5%, per data from Coindesk.
This indicates investors are generally optimistic about the possibility of a well-known financial company coming to Coincheck’s rescue, so to speak.
Monex up 23 points
Investors in Monex also appear optimistic about the takeover. Shares in the company company’s shot up 23% (Japan’s daily limit), closing at 424 yen (£2.95) on the Tokyo Stock Exchange.
Japan’s Financial Services Agency ordered Coincheck to overhaul its operations, including protecting the assets of clients and implementing anti-money-laundering measures, following January’s heist.
So, if the Monex deal falls through, it could spell curtains for the exchange which is facing hefty client compensations along with potential lawsuits.
Indeed, this Monex deal suggests Coincheck are currently struggling to comply with the regulatory requirements and rebuild its operations without external support.
The two companies are now seeking approval for the acquisition from the FSA and from shareholders.
Coincheck founding president Koichiro Wada and chief operating officer Yusuke Otsuka are expected to step down once Monex takes control, though they will remain as shareholders. Monex will appoint a new president and other executives.
Coincheck had been applying for a license from regulators when the theft took place in late January.
The FSA has held the view that Coincheck alone would not be able to continue its operations.
The regulator is expected to examine how a partnership with Monex would improve Coincheck’s practices.
Monex said it is is considering taking over Coincheck, though nothing has been confirmed, Nikkei reports.