Japan's Aso tells cryptocurrency exchanges to strengthen controls after 58b yen theft

[TOKYO] Japanese Finance Minister Taro Aso said on Tuesday that management systems at cryptocurrency exchanges needed to be strengthened after hackers stole 58 billion yen (S$698 million) of digital money from Tokyo-based Coincheck.

Mr Aso, who doubles as financial services minister, made the remarks after Japanese authorities said on Monday they would investigate all cryptocurrency exchanges in Japan for security gaps and ordered Coincheck to raise its standards.

"It was a matter for great regret that illicit access caused a massive cryptocurrency outflow from Coincheck on Friday," Mr Aso told reporters after a cabinet meeting.

"The Financial Services Agency (FSA) must appropriately monitor cryptocurrency traders to protect users. We will appropriately weigh the balance between promotion of innovation and protection of users in (supervising) cryptocurrency exchanges," he added.

Mr Aso has previously expressed some caution over excessive regulation on cryptocurrencies.

The theft at Coincheck - one of the world's biggest cyberheists - highlights the hazards of trade in an asset that policymakers are struggling to regulate, as well as the broader risks for Japan as it aims to leverage the financial technology or "fintech" industry to stimulate economic growth.

Masatsugu Asakawa, Japan's top financial diplomat, said on Monday that cryptocurrency regulation was likely to be on the agenda at the March meeting of G-20 finance ministers and central bankers in Argentina.

World leaders meeting in Davos last week issued renewed warnings of potential dangers from cryptocurrencies, with US Treasury Secretary Steven Mnuchin highlighting Washington's concerns over digital money being used for illicit purposes.

The FSA ordered improvements on Monday to operations at Coincheck, which on Friday suspended trading in all cryptocurrencies except bitcoin after hackers stole 58 billion yen of NEM coins, among the most popular digital currencies in the world.

REUTERS