China’s Finance Minister, Taro Aso, has advised cryptocurrency exchanges to tighten their cybersecurity posture and standards. This advise come after last week’s one of the largest hack from Tokyo-based Coincheck for $530 million worth of XEM token.
At the cabinet meeting on Tuesday, Taro So asserted more on strengthening the domestic cryptocurrency exchange and appropriate monitoring of the ecosystem to protect consumers.
He went on to add,
“It was a matter of great regret that illicit access caused a massive cryptocurrency outflow from Coincheck on Friday. The Financial Services Agency [Japan’s financial regulator] 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.”
Aso made it clear that an investigation will take place to ascertain the how-and-why the hack took place. It may include on-site investigation,. If need be. FSA has ordered Coincheck to foolproof its security.
As reported previously, Coincheck executives admitted to storing funds in its hot wallet, which was ultimately compromised. Hot wallets are susceptible to unauthorized access, unlike cold wallets that are secure and kept offline.Coincheck had stored 500 million NEM tokens in a hot wallet without multi-sig security, which only made it more vulnerable to a hack.
Cryptocurrency regulation is most likely to be discussed at G20 nations’ finance ministers and central bankers at Argentina during this year’s meet in March.