Traders to sue Coincheck over frozen crypto withdrawals

Traders to sue Coincheck over frozen crypto withdrawals

- in All News, Cryptocurrencies, Featured News
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Ten Japanese traders will file a claim at the Tokyo District Court over Coincheck’s freezing of cryptocurrency withdrawals, following the Coincheck $530 million heist of NEM coins in January, reports Reuters.

The traders will demand that Coincheck allows them to withdraw their cryptocurrencies in a wallet outside the exchange, their lawyer Hiromu Mochizuki told the news wire agency. There may be a second claim – for damages over the heist, he also said.

On Tuesday Coincheck allowed clients to withdraw their JPY funds, but crypto withdrawals are still frozen, pending confirmation of the integrity of its security system. According to some media reports, in the first day of fiat withdrawals, Coincheck clients withdrew the JPY equivalent of  $373 million.

The first news of possible lawsuits against Coincheck first appeared earlier this month, when media reported that some exchange clients have formed an association to protect their rights and are considering court action over the frozen fund withdrawals.

Coincheck is one of Japan’s largest cryptocurrency exchanges. It became victim of a hacker attack that stole NEM coins worth $530 million at the time of the heist, affecting around 260 000 Coincheck clients. This was almost all NEM coins kept by the exchange. Subsequently the exchange suspended operations and withdrawals of existing funds and was paid a visit by inspectors of the  Financial Services Agency (FSA) – the body regulating the activities of cryptocurrency exchanges in Japan.

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