crime

Coincheck may be unable to reimburse customers after theft

123 Comments

The requested article has expired, and is no longer available. Any related articles, and user comments are shown below.

© KYODO

©2024 GPlusMedia Inc.

123 Comments
Login to comment

For those who have no idea anything about cryptocurrency, Square just made an illustrated children’s story to explain Bitcoin - simple enough to wrap your thoughts on:

https://www.theverge.com/tldr/2018/1/31/16955374/square-bitcoin-decline-satoshi-illustrations-wise-financial-decisions-cash-app

0 ( +0 / -0 )

@gaijinpapa - yes, MLN does unfortunately see it's fair share of rotten eggs... just like the traditional Company marketplace. What matters is whether the products being marketed actually help the people who buy them. One such company Jeunesse, has grown rapidly to become a multi-billion dollar annual income leader in the MLM market-place, so they must surely be doing something right.

1 ( +1 / -0 )

I wonder whether these guys may have actually carried the heist themselves ?

Certainly for the exchange to have so much money in order to refund Clients, one has to question where'd it all come from... ? Front running the clients ?

0 ( +0 / -0 )

I get the impression that the people talking up bitcoin etc just want everyone to buy and push the price up and then they’ll sell knowing that it will bust.

Reminds me of people who go from one MLM to the next, always saying this one is better.

If you had some spare cash, it made sense to buy a little years back with money you could afford to lose.

But people borrowing money to buy this stuff is a recipe for disaster.

0 ( +0 / -0 )

It's not just fees - the banks give you a sub-par exchange rate, so if you transfer with a bank, you're paying them to give you less money on the other end. It's the combination of a sub-par rate plus the fees.

For large amounts of money, the exchange rate is certainly the primary factor to consider.

However, exchange rate costs can be virtually eliminated by exchanging the money at prevailing market rates, via a non-bank exchange service.

E.g. if you want to get yen in Japan to US dollars overseas, you 1) deposit your yen to a domestic money exchange service (YJFX! or Central Tanshi FX), 2) convert it from yen to dollars there, then 3) withdraw your dollars to a bank that handles overseas transfers, and then 4) pay the bank the fixed cost of sending those dollars overseas.

The process works in reverse when coming the other direction - you transfer your foreign currency to your money exchange service directly, where you flip it for yen, and get your yen withdrawn to your Japanese bank account.

People are welcome to use bitcoin to achieve similar goals if they think it is working for them cheaply and convenient, but there are such established services as above to get cheap deals, for the sacrifice of some convenience and account setups. Convenience is part of what people pay for when using the more expensive package that banks offer.

You have mentioned you only pay 2000 yen to make a transfer, and how many yen/cents do they hack off the current exchange rate?

If you use the method outlined above (and the link I posted earlier has tailored details of the cheapest method, per currency and amount) then you pay nothing in exchange rate costs. You only pay a fixed cost - it is scalable.

It's pretty straightfoward. You plug a USB device into your computer, and handle the transaction from that. 

I can't plug a USB device into my mobile device, which is how I bought my nominal amounts of cryptocurrency.

0 ( +0 / -0 )

I can only imagine the real nerds are staying on top of all the cryptocurrency security measures, because even a semi-nerd like me, who has used Linux, can't be bothered with the hassles of safeguarding my cryptocurrencies.

It's pretty straightfoward. You plug a USB device into your computer, and handle the transaction from that. It's less difficult than figuring out how to buy the currency in the first place. Ten minutes of googling 'cold storage' and you'll know everything you need to.

0 ( +0 / -0 )

Hope you are aware of your income reporting obligations. Would be real disappointing to read about our main cryptocurrency champion investigated by authorities for tax evasion or worse!

Of course. We're a company with accountants and everything is above board.

I am really surprised your bank transfer fees amount to 100 dollars...

It's not just fees - the banks give you a sub-par exchange rate, so if you transfer with a bank, you're paying them to give you less money on the other end. It's the combination of a sub-par rate plus the fees.

You have mentioned you only pay 2000 yen to make a transfer, and how many yen/cents do they hack off the current exchange rate?

0 ( +0 / -0 )

Cmiiw - but isnt the point of crytocurrency is to not involve banks / large institution cause you perceive they are ripping you off with their fees, then isnt this case all so ironic

0 ( +0 / -0 )

you chould never leave huge amount of crypto on any exchange. Then you should learn how to make a cold wallet. If your crypto is in a cold wallet with many copies hidden at different places you can't be stolen.

What a PITA that all is. 

Yes crypto is a lot more complicated than cash 

Indeed!

It's all kind of like when I used Linux. Basically it was complicated and took some messing around to get it working smoothly, and then time constantly maintaining the system to be secure. But using Linux did have some clear advantages, such as breathing life back into my old computer which was unable to continue to run newer versions of Winblows.

I would hazard a guess that your typical bitcoin speculator has their bitcoins etc all on their exchange, readily available for speculative trading activity. 

I can only imagine the real nerds are staying on top of all the cryptocurrency security measures, because even a semi-nerd like me, who has used Linux, can't be bothered with the hassles of safeguarding my cryptocurrencies. (But then, I only have a token amount of it to my name...)

1 ( +1 / -0 )

To answer those who says crypto is a ponzi scheme and not surprising to be stolen because it's crypto... Just compare crypto to what's it's trying to replace: cash! Is it different with cash? Is cash a ponzi scheme too? Is cash too dangerous to own because it can be easily stolen???

Yes you can get stolen but you have to know what you are doing and you have to take precautions!

First you chould never leave huge amount of crypto on any exchange. Then you should learn how to make a cold wallet. If your crypto is in a cold wallet with many copies hidden at different places you can't be stolen.

Yes crypto is a lot more complicated than cash and if you don't understand it stay away or you could be greatly disappointed...

1 ( +1 / -0 )

It depends on the amount and the currency, but there is a good site here that stays on top of the cheapest ways to do foreign remittances.

http://kaigaisokin.seesaa.net/

It’s a little hard to navigate through all the info but this guy is very thorough.

0 ( +1 / -1 )

So where will the benefit be ?

Ask me if/when that actually happens.

I personally doubt the banks will ever be able to do it cheaper than a cryptocurrency due to the fact that bake need to make a profit and cover their overhead through fees.

Either way, right now bitcoin saves me hundreds of dollars every month in transfer fees.

That all said, which bank are you usually that does overseas transfers for only 1800 yen? I’ve never seen a Japanese bank with such low overseas transfer rates. That’s even cheaper than some of the wire transfer services out there - people need to know this cheaper bank alternative.

-1 ( +0 / -1 )

Under 10K falls within the reportable amount to the Japanese Government. And the list doesn't inlcude those Countries that are more restrictive upon money transfers.... so it doesn't appear that you're on the bleeding edge of these crypto transactions.

Today, I can wander into a bank, and currently send money overseas and pay the 1800+ yen wire transfer charge ... which hopefully,, will be reduced when they adopt a block-chain-like mechanism such as that purported by Ripple, but will inevitably just end up a "token" gesture ... such as to 1000 yen - thus negating any Credit Card / Debit card like transactions across borders..

So where will the benefit be ?

2 ( +2 / -0 )

Which countries do you transact between and are the amounts sizeable ?

Japan, Australia, and the US. Generally under $10,000, and the recipient usually ends up with around $100 or ¥10,000 more than had we used a bank transfer. With 4-5 of these per month, it ends up making a huge difference.

-1 ( +0 / -1 )

Q. Have any of the various BlockChains underlying numerous Cryto-Currencies been hacked yet ?

0 ( +0 / -0 )

@Strangerland - Which countries do you transact between and are the amounts sizeable ? For example a 15 minute processing time could lead to a sizable loss with a transaction say 100MM or so...

0 ( +0 / -0 )

Is there any information upon the details of this hack ... surely hot wallets are only accessible to those who have the private key - and if so, how were those obtains in such large quantities, surely the private keys weren't persisted upon the "CoinCheck" Servers and accessible to hackers ... and how could they have obtained access ? Surely anything connected to the internet should have strict rules in-place to allow only expected traffic... or am I just really missing something. Finally, why couldn't they restrict transactions to either know sources of interaction (known IP/domains), or even implement some sort of two level authentication per transaction ?

0 ( +0 / -0 )

That the possible, and my I add a plausible politically unacceptable reality. Foremost, a terrifying prospect for all governments.

0 ( +0 / -0 )

HI Strangerland, your political analysis is correct.

Blockchain, at least the concept of, a standalone alterative financial economic system imperious to governmental intervention, without recourse to any prevailing exchange rates stands to reason.

And wiill be a counter predicative to the very definition of government that includes, income, taxation, and expenditures.

0 ( +0 / -0 )

@Strangeland 

do you own blockchains and if so which one? Are you buying in dollar and selling in yen?

I do own a blockchain - it’s open source and I’ve got it set up on my laptop.

But I think you’re asking if I am holding any funds in crypto currencies, and for the most part, I’m not. I was given one bitcoin a few years back for some work I did, of whichwhich I have a small portion left after having spent most of it on various things. I haven’t jumped on the bitcoin investment wagon as it’s too high risk for me.

The only bitcoin trade I do is for international money transfers. I only own the coins for the minute or so it takes to make the transfer.

0 ( +1 / -1 )

If one’s motivation for using bitcoin or alternatives was to get a good exchange rate, that’s rather ridiculous given that these cryptos are so volatile that any purported saving on fees could easily be consumed by a plunge in value of the crypto in the meantime.

Hi fxgai, All digital currencies, in all their periphery of forms, have one common denominator, speculative gain.

So how one hedges the risk-averse effects to the international financial markets is paramount.

I read your financial experience, and skill, so to predict when regulatory intervention, cumbersome as some would assume, hither to technically correct. The reality could be to nailing the prediction when change will take place, who will be at the forefront of that change and the moment?

0 ( +0 / -0 )

I have never looked at the block chain as being a problem solver, it’s an innovation.

Upon reconsideration I guess bitcoin did solve one problem: the two generals problem. It’s the solution to that problem that was innovative (in fact, absolutely and amazingly brilliant). And what I love about this solution is that it puts control of people’s money into their own hands, in an extremely secure yet anonymous manner. The other thing I love about it is that there isn’t a damn thing anyone can do about it other than whine.

1 ( +1 / -0 )

Does not make it relevant that transaction is in your hands. Bitcoin appears in some hands !

No it doesn’t.

Not a Ponzi scheme by definition but a illegal transfer of power

There is nothing illegal about it

to some that I did not decide for, same as for bankers.

And no one is telling you that you have to use bitcoin. Same as no one is telling you that you have to use a bank

0 ( +0 / -0 )

If one’s motivation for using bitcoin or alternatives was to get a good exchange rate, that’s rather ridiculous given that these cryptos are so volatile that any purported saving on fees could easily be consumed by a plunge in value of the crypto in the meantime.

This is a risk I’m willing to, and do take, and I’ve saved thousands of dollars already. I minimize the risk by making the transfer immediately after purchasing the bitcoin, and convert it to the local currency on the other end immediately when it’s received. I haven’t been burned yet, and I’d have to get burned extremely bad at this point to end up in the red overall.

I don’t trust the volatility of bitcoin to hold money in. But if you take any random 30min or so slice of time, it’s very unlikely that you will get hit by a big enough rate swing that a bank transfer would be cheaper.

0 ( +0 / -0 )

Thanks nan des ka for explanation.

Does not make it relevant that transaction is in your hands. Bitcoin appears in some hands !

Not a Ponzi scheme by definition but a illegal transfer of power to some that I did not decide for, same as for bankers.

And you explained well that energy costs is a problem for blockchain based transactions.

Illegal currency or asset is fine until you become a victim LOL.

0 ( +0 / -0 )

If one’s motivation for using bitcoin or alternatives was to get a good exchange rate, that’s rather ridiculous given that these cryptos are so volatile that any purported saving on fees could easily be consumed by a plunge in value of the crypto in the meantime.

The cheapest way to transfer money internationally depends on the amount of money involved, in my experience.

The way to do it cheap is to find a cheap exchange service in Japan, which are extremely cheap these days, and a cheap option to transfer money overseas (without a currency exchange - eg you send dollars and get dollars in the other side). This can all be done for a fixed cost now. Bitcoin may be cheaper in that there is less fee to send the money, but you could easily lose that benefit through its volatity. Of course you might get lucky too, but then we are back to speculation.

2 ( +2 / -0 )

After going back through and reading this thread again, its evident that:

1) There are very few people who have an understanding of blockchain, beyond a summarized explanation of what it is, most if asked "What is Blockchain?" would answer its "Bitcoin".

2) Bitcoin is by product of ledger transactions, it's a reward for being the first node to solve the complex mathematical equation binding blocks together, once 6 other nodes have validated the block it is permanent and the data is available for everyone in the world to see, and confirm as legit. To hack this you would need to revalidate every transaction behind the block you are hacking and also be able to maintain the structure of the current Blockchain transactions taking place. The amount of computing power and the energy needed to even attempt to pull this off is ridiculous, there is no way this can be managed, because of the peer to peer system.

Lack of understanding the true nature of Blockchain = ponzi, scam, ripoff etc. etc.

What is happening is the banking system is being by passed, because the source and the end user don't need the intermediary. Thus the banks aren't making any profits from the fees they charge to handle YOUR money and they don't have it in their possession for 3-10 days using it to make money, before being deducted from their ledger at the other end.

It's basically the same system we use now except now the control and movement of YOUR money is in Your hands.

0 ( +0 / -0 )

What happens when the last Bitcoin has been mined? The miners start charging transaction fees, no? Couldn't those fees be increased by consensus in the same way other updates are achieved?

Minors already get a small fee for every transaction. If I recall correctly this is a fixed fee and cannot be changed.

I think this is part of the problem. It's confirmation and sunk cost bias. You've spent hundreds of hours studying something and now you are unable to look at it objectively

So I’ve overeducated myself. Yeah, right. You realize your logic can be equally applied to your case right? You’ve spent hours trying to prove it’s a lemon and are unable to look at it objectively

and admit that it's a lemon which only offers solutions to problems which don't really exist, or aren't particularly serious.

The same could be said of cash and credit cards. I have never looked at the block chain as being a problem solver, it’s an innovation.

-1 ( +1 / -2 )

And how would that [passing a law which taxes or haircuts exchanges] work? The government cannot do anything about cryptocurrencies. It's like a virus on the internet in its own way .

Very simply, the government passes a law like any other law. The vast majority of people and businesses are law abiding and will comply. Nobody expects 100% compliance or enforcement capability before passing regulations. We have laws against drugs but we still have some drug users and international networks of drug smugglers.

There is no central body to start charging fees on cryptocurrencies. That's the beauty of them - the run on their own, without any intervention, and as well cannot have intervention on them.

What happens when the last Bitcoin has been mined? The miners start charging transaction fees, no? Couldn't those fees be increased by consensus in the same way other updates are achieved?

I don't think you will find anything safer than bitcoin in which to store your money.

Except I don't store my money anywhere and neither do most financially savvy people. They invest it somewhere to get a return. This is why you don't see private gold vaults even in the mansions of the super rich. This whole idea that people need to store and protect their money is a shadow monster you've created in your imagination.

as someone who has investigated it deeply, 

I think this is part of the problem. It's confirmation and sunk cost bias. You've spent hundreds of hours studying something and now you are unable to look at it objectively and admit that it's a lemon which only offers solutions to problems which don't really exist, or aren't particularly serious. In my opinion you're a bit like the guy in 2001 who thought the Segway was going to revolutionise transport. I think you need to spend an equal amount of time studying economics to figure out where you may be going wrong.

3 ( +3 / -0 )

If your primary motivator for crypto is good exchange rate than probably should look into islamic hawala banking, I hear they also offer good rates.

Why would I do that? Bitcoin works just fine.

0 ( +2 / -2 )

Hi inkjet, I am not convinced CoinCheck acted contrary to any financial regulation or legislative process.

I think there is going to be a long wait to find out.

Institutions are investing hundreds of millions into researching and developing blockchain's future applications, virtual currency is amongst the first that could revolutionise across boarder payments.

CoinCheck reckless disregard for implementing adequate securities protocols is breathtakingly negligent.

Worst of all the loss of such a large sum and the manner of which this crime was committed has brought doubt to the validity and also to the ability to ascertain future investment capital.

All digital currencies are being tarred with the same brush, guilt by association. The allure for criminal intent, money laundering, tax evasion is obvious as the distributive ledger at least theoretically is beyond the reach of government interference or central bank manipulation.

I think you could well be spot with the suggestion that any form of close regulation is wishful thinking. However politics and finance are never far apart.

1 ( +1 / -0 )

But you’ll never get a rate as good as bitcoin, because banks need to make money to cover overhead.

If your primary motivator for crypto is good exchange rate than probably should look into islamic hawala banking, I hear they also offer good rates.

1 ( +1 / -0 )

Have you never used a bank before? You realize they charge fees right? And have you never looked into the banking industry? They lend your money out, so you can't say they don't do anything with it. They take the money you put into your account, and they lend that to others, charging them interest on it.

Well the non japanese banks I have been using for the past 20 years do not charge any fees on my savings accounts, and given the bank of a specific country I get annual interest of 3.5 to 4% on these savings accounts and if I make the deposits fix, the annual interest rate is around 7%. The banks have multiple methods to lend to others, unless until there is a bank run ,you can always withdraw/transfer whatever you have in your accounts.

1 ( +1 / -0 )

Well that depends on the bank, on the technology curve the japanese banks are way behind, example transfer from banks in singapore to banks in many countries, the transfer is reflected within the hour, and based on the amount they will give you a good exchange rate.

But you’ll never get a rate as good as bitcoin, because banks need to make money to cover overhead.

And why should I pay a third party to transfer my money when I can do it on my own.

-1 ( +0 / -1 )

I get and send dozens of international bank transfers every month, and I've never seen one that was free or reflected within an hour. At the very minimum, I pay 2500 yen to receive transfers, and the amount paid when sending them is variable. And it always takes 2-3 days in both directions.

I've done a number of bank transfers with bitcoin, it takes about an hour, and the costs are not even comparable to the banks. The fees are less, an banks don't give you the prime exchange rate, they drop 4-5 yen off the exchange rate. So you're getting a worse rate and paying larger fees, for a transfer that takes significantly longer.

Well that depends on the bank, on the technology curve the japanese banks are way behind, example transfer from banks in singapore to banks in many countries, the transfer is reflected within the hour, and based on the amount they will give you a good exchange rate.

1 ( +1 / -0 )

Heh, so I just went back through this thread, and I got a lot of downvotes for posting the truth about bitcoin.

0 ( +1 / -1 )

i understand Bitcoin hasnt been hacked yet. But isnt just a matter of time?

As someone who has looked deeply into the mechanics of it, and can understand it on a technical level, I am going to come out and say no. And I pretty much never make absolute predictions like that. Hacking involves finding a security hole in a program, to find a way in that the developers didn't envision. But Bitcoin is more than a program, it's actually program agnostic - you can work with it with multiple programming languages. At it's core, Bitcoin is really just a database, a ledger of interactions. It's the paradigm of how that ledger is decentralized, and how the various components within it interact, that make it unhackable.

-1 ( +0 / -1 )

There is a political dimension when voters money disappears and the relevant regulatory government authorities play dumb sitting on their hands.........

That's like asking the government to regulate the environment on mars. They can try all they want, but there is literally nothing they can to do affect it.

0 ( +1 / -1 )

it strikes me the lack of transparency also makes theft harder to track.

Any person who wants to can track the entire lifespan of a coin from creation until present. It's entirely transparent. Every transaction that has ever been made is right there to see for anyone who wants to see it.

-1 ( +1 / -2 )

It’s a scam because the cryptocurrency markets aren't just volatile, they are also extremely murky and riddled with fraud. Needless to say, this is an unregulated and risky activity all by itself, but it is also plagued by scammers.

Sorry, I don't see an explanation of what the scam is there. Once again, people are calling it a scam, yet no one seems to be able to explain what the scam is. Hmmmm.

-2 ( +0 / -2 )

Those fees depends on kind of transaction, example a international money transfer, some banks will not charge you anything and the transfer will reflect within one hour.

I get and send dozens of international bank transfers every month, and I've never seen one that was free or reflected within an hour. At the very minimum, I pay 2500 yen to receive transfers, and the amount paid when sending them is variable. And it always takes 2-3 days in both directions.

I've done a number of bank transfers with bitcoin, it takes about an hour, and the costs are not even comparable to the banks. The fees are less, an banks don't give you the prime exchange rate, they drop 4-5 yen off the exchange rate. So you're getting a worse rate and paying larger fees, for a transfer that takes significantly longer.

-3 ( +0 / -3 )

Given that the coins have no inherent value and do not meet the criteria of money

Both of those statements are wrong.

it needs this speculative bubble to burst and a period of price stability to emerge.

How do we know that hasn't already happened? The value did crash, by like 45%, and is holding stable right now. Maybe that WAS the bubble bursting, and now it's got it's stable value. Time will tell. When it holds at a price for a year or so, that's when I will consider it to be stabilizing.

-2 ( +0 / -2 )

In any case, couldn't the government pass similar legislation calling for a haircut on crypto exchanges?

And how would that work? The government cannot do anything about cryptocurrencies. It's like a virus on the internet in its own way .

With fees, both banks an cryptos charge fees (or will eventually charge fees) and the crypto fees can sometimes exceed the bank's.

There is no central boy to start charging fees on cryptocurrencies. That's the beauty of them - the run on their own, without any intervention, and as well cannot have intervention on them. That's what makes them appealing.

If you make a mistake or you've been scammed, they will help you recover your money.

Not in Japan. People who get hit with the ore-ore scam don't get their money back from the banks.

Your legally earned money is your money and you can do anything with it, the bank is not going to touch that.

Have you never used a bank before? You realize they charge fees right? And have you never looked into the banking industry? They lend your money out, so you can't say they don't do anything with it. They take the money you put into your account, and they lend that to others, charging them interest on it.

It would also really help put things in perspective if the crypto advocates would honestly tell us how much money they are (or are planning, once the currency stabilises) to protect from these potential bank failures, tyranical governments seizing accounts and runaway hyperinflation. $500? $1,000? $5,000? $25,000?

If it stabilizes, I'll keep the majority of my cash in bitcoin, with enough fiat currencies to handle that which bitcoin cannot.

Anything beyond that begs the question of why you aren't invested in more productive and safer assets.

I don't think you will find anything safer than bitcoin in which to store your money. I'll come out right now and say as someone who has investigated it deeply, I don't think it is hackable. To hack it, you would need more than 50% of the total computing power of all the miners out there. Anyone with that money would be better served investing into bitcoin, because the second they hacked it the value would collapse, and their hacking would become meaningless.

-3 ( +0 / -3 )

rocknroll

im not sure what they can do. It’s untracable. If Coincheck broke laws they can be punished. Probably fines. But the money is untracable and uninsured.

i understand Bitcoin hasnt been hacked yet. But isnt just a matter of time? I put my faith in common sense solutions.

the old saying, you can’t cheat an honest man comes to mind.

0 ( +0 / -0 )

The reality inkjet, is that Coincheck has lost, 58 billion yen ($534 million) of its customers' holdings.

No government in their right mind is going to ignore that.

There is a political dimension when voters money disappears and the relevant regulatory government authorities play dumb sitting on their hands.........

That will come back at the ballot box.

-1 ( +0 / -1 )

My understanding of crypto currency is limited. But it seems at its heart its value is in being an unaccountable ‘currency’. If that is a fair characterization then I see the value for those looking to hide something. But it strikes me the lack of transparency also makes theft harder to track.

Of course at the moment it’s perceived value is its get quick allure.

Of course I could be dead wrong. But I have no interest in finding out first hand.

1 ( +1 / -0 )

@strangerland

It’s a scam because the cryptocurrency markets aren't just volatile, they are also extremely murky and riddled with fraud. Needless to say, this is an unregulated and risky activity all by itself, but it is also plagued by scammers.

2 ( +2 / -0 )

Crypto currencies are a speculative gamble, not a scam, in many respects a horse race.

From start to finish. However one needs to understand that your currency on start needs to converted to profit as it passes the winning post. Please think about that carefully.

1 ( +1 / -0 )

@commanteer

If I may answer, for one, you have to trust banks. You have to trust them not to lose or mismanage your money (through reckless investments), you have to trust them not allow your money to be taken by the government as a Cyprus style "bail in." And you have to pay ridiculous fees at times. With crypto, you don't have to trust anyone (unless you choose to leave it on an exchange like CoinCheck).

I also remember how much trouble it has been in the past to open a bank account. I remember the runaround I got trying to open an account in London without showing a pile of money or a solid job. I understand this is much worse now, especially for people in developing countries. The poor have no access to banks. They have to depend on middlemen, who of course, make nice profits for facilitating business.

The bank unless it closes down is not going to loose or mismanage your money, they can simply create money for investments, loans etc. Those fees depends on kind of transaction, example a international money transfer, some banks will not charge you anything and the transfer will reflect within one hour.

Most banks will open a zero balance account, that issue is with specific banks not the banking industry. As for developing countries, it depends, example in India, the Modi govt has created banking accounts in mass for the poor and directly transferred the benefits into those accounts, and as such bypassed the garbage corrupt middlemen.

https://www.forbes.com/sites/saritharai/2014/08/29/india-launches-a-massive-program-offering-bank-accounts-to-the-poor/#2a2638322355

2 ( +2 / -0 )

 In any case, couldn't the government pass similar legislation calling for a haircut on crypto exchanges? 

Sure, at the moment, they can. But sensible people don't leave their crypto in exchange. They keep it in private wallets the government can't tough. In a year or so, decentralized exchanges will be up and running. No government will be able to tap into those as there will be no central point to tap into.

when such a large amount is stolen then for the thief to benefit he/she has to use them or sell them for real money.

This is where the thief screwed up. The NEM address that holds the stolen coins has been put on a voluntary blacklist by major exchanges. There will still be bad actors and tiny exchanges that might take the the funds at a significant discount, but no way they could handle that volume. I suppose the thief could just sit on the funds and hope that NEM becomes a commonly accepted currency at shops around the world. Then he might be able to part with it, but then only slowly again.

0 ( +0 / -0 )

Nope. That’s like saying the yen is a ponzu scheme. It’s a pretty ridiculous statement.

If you want to criticize bitcoin FX trading, call it for what it is - a risky investment, and/or speculation. Try to keep it honest.

I am no expert on crypto currency but have followed the rise of bitcoin with interest for several years and do know a fair amount about finance and investments.

It is certainly a risky investment - the relative price fluctuations show that and as a result, crypto currencies do not really qualify as money in the traditional sense - they are not yet seen as stores of value and are not readily usable as a means of exchange.

While they are clearly not ponzi schemes in the traditional fraudulent sense of the word, there is a similarity which is shared with many speculative bubbles and all ponzi schemes. The way to make money is to get in early and hope that your exit route is funded by the "greater fool".

Given that the coins have no inherent value and do not meet the criteria of money, investors are working on the basis that others will come and buy them at greater value.

I think that there is a role for crypto currencies as a future means of exchange, but it needs this speculative bubble to burst and a period of price stability to emerge.

2 ( +2 / -0 )

It would also really help put things in perspective if the crypto advocates would honestly tell us how much money they are (or are planning, once the currency stabilises) to protect from these potential bank failures, tyranical governments seizing accounts and runaway hyperinflation. $500? $1,000? $5,000? $25,000? Anything beyond that begs the question of why you aren't invested in more productive and safer assets. Even if the argument is that they don't want to take any chances with their hard earned money, you are far more likely to get hit by a bus than be the victim of a bank collapse or a hyperinflating economy. What extreme precautions are they taking to avoid the bus? I wonder.

1 ( +1 / -0 )

Blockchain is a good, it just got a bad rap from being synonymous with the dark web. It prevents double spending of the same money. Unlike our trusted banking institutions, they may spend your money 2 or 3 times without ever turning it loose. Peer to Peer system keeps everything legit, you can only spend what you have, you cant run to the back and just print more. So is there a use for Crypto? Yes there is, but its so new its still volatile, governments cannot regulate it yet, they will figure out a way to regulate someday. Right now its safer to go the Craps Table.

2 ( +2 / -0 )

Sure if you don’t mind giving your money to banks. I look forward to bitcoin (or whichever currency ‘wins’) stabilizing so that I can keep my money out of the hands of the banks

Your legally earned money is your money and you can do anything with it, the bank is not going to touch that. Now if the money is illegal than off-course you want to keep it out of the bank, and the cryptocurrency is god send for this type of money.

1 ( +1 / -0 )

An imaginary dog ate the imaginary money.

0 ( +0 / -0 )

@commanteer

You have to trust them not to lose or mismanage your money (through reckless investments), you have to trust them not allow your money to be taken by the government as a Cyprus style "bail in."

Thanks for your reply. You mentioned alot there and it would take an essay to pick it apart in detail, but basically I think your fear of bank failure is completely misplaced, much in the same way that other advocates of crypto imagine that inflation is a credible threat to their savings. Few people hold significant sums of cash just sitting in a bank account. They invest it into assets that yield a return. It's a non-issue especially considering we have deposit insurance in Japan. What happened in Cyprus was an extraordinarily complicated situation (and it's debatable whether the average Cypriot actually 'lost' anything even after the haircut, but that's a discussion for another day). In any case, couldn't the government pass similar legislation calling for a haircut on crypto exchanges? With fees, both banks an cryptos charge fees (or will eventually charge fees) and the crypto fees can sometimes exceed the bank's. Banks also charge higher average fees because they actually provide a corresponding service. If you make a mistake or you've been scammed, they will help you recover your money. Your other points about banking in the 3rd world are interesting and I agree.

0 ( +0 / -0 )

Hopefully... it will come back to purpose it was intended for, which is people using it to buy and sell or simply send each other payments without using the rediculously expensive, restrictive, regulated, money making and purpose built complex banking transaction system we all have come to loath today!

That's what I'm waiting for.

-3 ( +1 / -4 )

enjoy your cryptocurrency scams

I've asked you in every thread to explain what exactly the scam is, and you always run away and avoid answering.

-3 ( +1 / -4 )

Now matter how secure they make this crypto currency phenomenon, someone somewhere is going to find a way to manipulate it. It's not tangible currency, so as long as hackers exist there will always be crypto robberies!

Bitcoin has never been hacked. You seem to be confused.

-5 ( +0 / -5 )

enjoy your cryptocurrency scams

-2 ( +0 / -2 )

Any person with a bit of sense saw this coming.

How? What were the warning signs that this exchange was going to lose money?

This is the best scam of our present times.

What exactly was the scam?

-5 ( +0 / -5 )

Any person with a bit of sense saw this coming. This is the best scam of our present times. I can’t feel sorry for people who were defrauded. Sorry.

1 ( +1 / -0 )

Now matter how secure they make this crypto currency phenomenon, someone somewhere is going to find a way to manipulate it. It's not tangible currency, so as long as hackers exist there will always be crypto robberies!

1 ( +1 / -0 )

The problem is not the security of the crypto currency itself like bitcoin, it’s the exchanges or middlemen between the two which was not the original idea behind the currency. If the trading is done pier to pier and not through a third party such as an exchange and you do not divulge your password, it’s safe. The whole point to crypto currency has been lost because investors have climbed on the bandwagon as usual and have turned into an investment comodoity. Hopefully after everyone eventually gets burnt and the fat cats profit take, it will come back to purpose it was intended for, which is people using it to buy and sell or simply send each other payments without using the rediculously expensive, restrictive, regulated, money making and purpose built complex banking transaction system we all have come to loath today!

0 ( +0 / -0 )

I am the first to admit to knowing little about cryptocurrencies but when such a large amount is stolen then for the thief to benefit he/she has to use them or sell them for real money. Given the rarity of this currency won't that be immediately noticed and lead the authorities directly back to the thief?

0 ( +0 / -0 )

And loss

1 ( +1 / -0 )

Noticed man countries Andrew financial institutions see Bitcoins as assets and not as a currency.

But what do I know?

0 ( +0 / -0 )

commanteer, fxgai you both are correct to question he risk.

If you see black ice on the pavement, do you reach a foot out and slid into the office for the fun of it?.....

I has a conversation on Friday in the Izakaya with a mentor, smart, clever, head on the correct way up. She, (impolite, the cats mother) announced an investment of 70% of total life savings in bitcoin, committed. I won't elaborate further. Her husband will be foaming at the mouth. I could see she was mortified.  Greed, desire, opportunity, gain , it is a potent mix....

2 ( +2 / -0 )

The Winklevoss twins are heavily invested in bitcoin. When they cash out their coins (can that be done?), the currency will drop like a rock. Only idiots are in these fake currencies.

I see that a bunch of bitcoin investors are here, pimping this bubble. Get out now, folks. The end is nigh.

2 ( +3 / -1 )

I meant just @ Stranger! :-)

1 ( +2 / -1 )

This company should not have been allowed to operate without being licensed. BTC, and The Chain are solid.

@Burning Bush: Links please. I have found none.

@Stranger and Yang: Good to read that people who know are here!

@Disillusioned: All ‘currency’ is virtual, it’s a ‘trust’ and ‘belief’ system in an abstract.

0 ( +2 / -2 )

AND you can still sign up to Coincheck on their website!

Funny you should say that. I signed up just hours before this story broke. Now I have to start all over with another exchange.

What is it that 'the banks' are doing to you which is so objectionable?

If I may answer, for one, you have to trust banks. You have to trust them not to lose or mismanage your money (through reckless investments), you have to trust them not allow your money to be taken by the government as a Cyprus style "bail in." And you have to pay ridiculous fees at times. With crypto, you don't have to trust anyone (unless you choose to leave it on an exchange like CoinCheck).

I also remember how much trouble it has been in the past to open a bank account. I remember the runaround I got trying to open an account in London without showing a pile of money or a solid job. I understand this is much worse now, especially for people in developing countries. The poor have no access to banks. They have to depend on middlemen, who of course, make nice profits for facilitating business.

Want a business loan? Forget it. Yet, blockchains can now enable microloans to even the smallest venture in the most remote regions.

Want to send money to someone in Mongolia or Brazil. The banks will do it, for a significant fee, and it may take days to clear. Payment by crypto can be immediate and cheap.

These are just a few. I can think of more, but I still have to work. Blockchain is world-changing, in ways that are not quite evident to most people yet.

2 ( +3 / -1 )

I see in the updated story that Coincheck is freezing Japanese yen deposit withdrawals.

This suggests that they failed to segregate client funds from the firm’s assets.

This is pretty bad and would be illegal too, for other types of financial instrument dealing businesses. I’m not sure if the yen funds segregation rules formally apply to cryptocurrency dealers but they obviously should...

-1 ( +0 / -1 )

Crazy as it is, totally preventable, AND you can still sign up to Coincheck on their website!

2 ( +2 / -0 )

Always own your seed words and private keys, NEVER let any one own them or control them. Then it’s easy, safe and fun.

Ledger Nano S or Keepkey. Hardware wallets. Cold storage. Keep a bit for opening on Coinomi. Easy.

Buyer of Cyptos since 2013.

4 ( +5 / -1 )

The only person here who isn’t into cryptocurrencies ... is FXGai,

Let me confess that I do own a little crypto, but I only ever deposited a very nominal amount of money (prepared to never see it again), with the purpose of a) experiencing the new technology, and b) being part of an historic speculative bubble!

0 ( +1 / -1 )

If you can afford to play with crypto, then you ought to be able to afford a crypto hard wallet. Leaving your crypto to be managed by these online exchanges is absolutely dumb!

Coincheck will not recover diddly, that money is gone!

6 ( +6 / -0 )

Cryptocurrency exchange Coincheck may be unable to reimburse customers after, theft, disappearance, open sesame, hunt the tumble      ....... Theft?

The wallet was hot when it should have been *cold*** **to any outside influence.  

In hot mode the keys are live and at risk, to the wallets security architectures.

These protocols should always be controlled formally through an physical interface, a hardware security module. on a totally external rackable card with a secure cryptoprocessor with bespoke embedded integrated circuitry.

So orders received formally administer outgoing contracts are rink fence to secure customers payments for withdraw of funds.

A safeguarded physical device that can cleanse with a technology to register and wipe in the instance of on line or even physical breach       

This crypto-currency breach could have been prevented had the exchange implemented a formal best practice security approach. That is, investment in the necessary secure hardware with minimal automation so transactions to pay contracts that wish to withdraw their funds are protected.

Well that my opinion and also am assumption without all the facts, A matter for jurisprudence? To be consolidated within a logic or justification from a litigious perspective?...

1 ( +2 / -1 )

While the exchange has not disclosed the size of its asset base, Disclose please. I would really like to know.

May not be able to pay back. So there is still a shot I may recover my ¥100.000?

Monitoring closely.

0 ( +0 / -0 )

@Strangerland - Bitcoin has never been compromised. So your doubts are unfounded.

I think you should add 'yet' to that statement.

-1 ( +4 / -5 )

@Strangerland

I look forward to bitcoin (or whichever currency ‘wins’) stabilizing so that I can keep my money out of the hands of the banks.

Why? What is it that 'the banks' are doing to you which is so objectionable? And why are you leaving large amounts of money in the bank anyway? Most people with excess money invest it in stocks, bonds, property, etc.

4 ( +6 / -2 )

No speculation yet linking the hacking event to NK state sponsored group ?

0 ( +0 / -0 )

The reputation of crypto continues to take a hit. Really need to do your homework if you want to gamble, and it is a gamble, on bitcoin and alike.

0 ( +2 / -2 )

Not registered, not enough engineers... Lame excuses and criminal!

3 ( +3 / -0 )

Nope. That's a pretty ridiculous statement. The yen is nothing like tasty ponzu sauce. 

Read the posts of others and learn.

Learn what? How to make uninformed statements that show I don’t know what I’m talking about?

The only person here who isn’t into cryptocurrencies that knows what they are taking about is FXGai, and I actually have learned from him.

if someone else starts taking and making sense I’ll listen to them as well.

0 ( +6 / -6 )

Just saw a commercial on national tv for Coincheck yesterday actually. I guess the sharks are out already, and there’s lots of baitfish to work with here in sushiland.

3 ( +3 / -0 )

Well good luck trying to recover that crypto currency.

4 ( +4 / -0 )

Its time to stay away from crypto altogether, the only ones who support crypto are that mETH head Burarin and that fake Japanese Satoshi guy (who isnt even real anyways) Invest in US, Japan, Russia or International stocks instead.

-1 ( +4 / -5 )

Reminds me of that Steve Martin "Fred's Bank" skit - "Lessee, I got your money here somewhere - oh, that's right, third pocket."

5 ( +5 / -0 )

"Nope. That’s like saying the yen is a ponzu scheme. It’s a pretty ridiculous statement."

Nope. That's a pretty ridiculous statement. The yen is nothing like tasty ponzu sauce.

Read the posts of others and learn.

2 ( +6 / -4 )

I look forward to bitcoin (or whichever currency ‘wins’) stabilizing so that I can keep my money out of the hands of the banks.

When interest rates go higher in future, I think people will greatly prefer interest bearing bank deposits to cryptocurrencies.

This, as it is, is why I prefer to invest in overseas stocks and bonds rather than cryptocurrencies now.

4 ( +4 / -0 )

whole world should have just one physical currency.

-3 ( +1 / -4 )

The proof is in the numbers. Math does not lie.

97% of all bitcoins are held by 4% of addresses

How does that prove anything?

3 ( +8 / -5 )

I have always had doubts about the security of cryptocurrency

Bitcoin has never been compromised. So your doubts are unfounded.

0 ( +8 / -8 )

Strangerland, I know very little about cryptocurrency and thus will not convert to them from hard-earned yen.

I know lots about them, and the risk is too high right now for me to convert my yen to bitcoin

I reckon if you don't engage in international illegal activities, traditional fiat currencies will suit you just fine.

Sure if you don’t mind giving your money to banks. I look forward to bitcoin (or whichever currency ‘wins’) stabilizing so that I can keep my money out of the hands of the banks.

1 ( +7 / -6 )

Well I think the key is how your cryptocurrency data is stored.

But besides securely managing the data, people shouldn’t lose sight of the fact that there are now hundreds and thousands of cryptocurrencies, and it is all just data. You are just exchanging data with others for some agreed amount, and can flip the data for standard fiat currency.

The standard major fiat currencies all have relatively steady value most of the time.

Any given cryptocurrency you shake a stick at could be virtually worthless a week from now.

This stuff is no scam, no Ponzi scheme. But it is a purely speculative instrument that offers no return, other than perhaps the chance to flip it to another for a higher value in future. No need to put precious money there.

In 2018 speculators have not had much luck at even speculation, except those betting against.

6 ( +6 / -0 )

Bitcoin and all cryptocurrencies in general are the biggest scam put upon mankind yet.

The proof is in the numbers. Math does not lie.

97% of all bitcoins are held by 4% of addresses

http://www.businessinsider.com/bitcoin-97-are-held-by-4-of-addresses-2018-1

5 ( +8 / -3 )

If cryptocurrency is also called 'virtual currency', wouldn't that mean this is a virtual theft? There has been a number of cases of cryptocurrency disappearing. I have always had doubts about the security of cryptocurrency since its inception and this is why I would never turn my real cash into virtual cash.

0 ( +4 / -4 )

It’s interesting that this outfit had money for a slick TV commercial with Degawa on it, but not much money for properly running the business safely.

Good luck to the CEO and his staff in future, they look pretty young but they’ll have plenty of time to learn from their bungle this time around.

3 ( +3 / -0 )

where i live people trade fruit, vegetables and rice, and use cash in the supermarket to buy meling, sake and soya sauce. the only coins used around here are for a coffee from the vending machine. works fine.

6 ( +8 / -2 )

I can say with complete confidence that the outlook for the value of all currencies will be “variable.”

6 ( +6 / -0 )

I didn't know until now that Coincheck was not registered as an exchange under Japan's new law. And their security was disgraceful - they had the gall to say they "didn't have the engineering resources" to implement proper NEM security protocol. They pull in a million dollars a day... and lack engineers??

I wouldn't be surprised if NEM benefits from this in the long run. It's a good coin, but was lacking in public recognition. It's got that now.

@Strangerland: For all the silly comments above about bitcoin, I have leaned more toward ignoring them. As any English teacher in Japan knows, you can't teach an unwilling student. It is sad if they influence others, but there is plenty of good information out there for people who bother to look.

7 ( +8 / -1 )

@garymalmgrenToday  08:28 am JST

"Into Kim Jong Un's little piggy bank?"

quite the imagination!

1 ( +2 / -1 )

One thing extremely telling about any story on cryptocurrencies is that you find out just which posters are willing to make comments without actually knowing what they are talking about, showing unjustified confidence with their tone to portray that they actually do have a clue.

Just lets you know which poster's posts to take with a grain of salt in every thread - if they talk like they know what they are talking about, when it's plain as day that they have no clue of what they are talking about, then you cannot trust any of their posts on anything.

5 ( +15 / -10 )

Into Kim Jong Un's little piggy bank?

0 ( +5 / -5 )

Oh what do you know another cryptocurrency scam. Surprise

Say what? How was this a scam by the cryptocurrency? That's like saying that if someone pickpockets you, yen is a scam.

6 ( +16 / -10 )

Oh what do you know another cryptocurrency scam. Surprise

1 ( +8 / -7 )

The cryptocurrency fad really simply looks to be a ponzi scheme.

Nope. That’s like saying the yen is a ponzu scheme. It’s a pretty ridiculous statement.

If you want to criticize bitcoin FX trading, call it for what it is - a risky investment, and/or speculation. Try to keep it honest.

-6 ( +11 / -17 )

A 28-year-old woman working in the financial sector said she had invested some 800,000 yen for transactions

Sounds like she risked the money for short term speculation, not investment.

She’ll be more careful with her bonus next time around.

7 ( +8 / -1 )

No security in Japan and you shouldn't invest all in one thing.

12 ( +12 / -0 )

The cryptocurrency fad really simply looks to be a ponzi scheme. Yes, some are making a lot of real money off of it, but many more others are losing.

6 ( +15 / -9 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites