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Coincheck aims to compensate 260,000 victims of cryptocurrency theft next week

Coincheck President Koichiro Wada is seen at a press conference after the firm was issued with a business improvement order by the FSA, in Tokyo's Chiyoda Ward, on March 8, 2018. (Mainichi)

Cryptocurrency exchange operator Coincheck Inc. is set to compensate about 260,000 victims of digital currency theft some time next week, the firm said at a press conference in Tokyo on March 8.

Roughly 58 billion yen (about $54 million) worth of NEM cryptocurrency was stolen from Coincheck's exchange -- prompting the Financial Services Agency (FSA) to slap Coincheck with a business improvement order twice -- firstly on Jan. 29 and then again on March 8.

The latest business improvement order was issued on the basis that Coincheck lacks sufficient awareness about customer protection. The company also revealed at the press conference that emails containing malware software, which were opened by several company employees, appear to have been the initial trigger behind the cryptocurrency being stolen.

Six other cryptocurrency exchanges have also been hit with business improvement orders.

Meanwhile, two of the seven firms that were told to improve, Bit Station and FSHO, have also been ordered by the FSA to suspend all business operations for one month, between March 8 and April 7.

Bit Station and FSHO were issued with the business suspension orders based on the revised Payment Services Act, on the grounds that they had misused cryptocurrency for private purposes. This is the first time for any cryptocurrency exchange operator to have been ordered to suspend its business operations.

Moreover, the FSA has ordered all seven companies to submit a plan explaining how they intend to improve by March 22.

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