Monex Officially Acquires Coincheck In A $33.5 M Deal

In an official announcement, Monex group confirmed today that it is acquiring the previously hacked Coincheck in a $33.5 million deal. This acquisition will also involve the 100 percent transfer of shares that will take place on April 26 and a reshuffling of management as Toshiko Katsuya of Monex will replace Koichiro Wada as the CEO of Coincheck.

Monex group takes over Coincheck as its wholly-owned subsidiary

On Friday, in a joint conference by Monex Group and Coincheck Inc., it has been announced that the online brokerage company is acquiring the troubled exchange. The Tokyo-based Coincheck has been acquired in a deal of 3.6 billion yen that is approximately $33.5 million.

Moex announced:

“The cryptocurrency exchange business plays a core part in a vision of “MONEX’s new beginning”.

It has been confirmed by Monex group that as per the share acquisition agreement signed today, the company will be acquiring 100 percent shares of the exchange that is about 1.78 million shares at the cost of 3,600 million yen. The shares will be transferred at the end of this month i.e. April 26. On the same day, the founder and CEO of Coincheck, Koichiro Wada, and COO Yusuke Otsuka will also step down from their management position.

At the beginning of this year, Coincheck was hit by a cyber attack where it lost about $532 billion worth of NEM, at the time. Regarding which the Financial Services Agency (FSA) issued a business improvement order to the exchange. Now, in its bid to enter the growing and lucrative digital currency industry, Monex, the third largest online brokerage in Japan is making the exchange its wholly-owned subsidiary.  

Monex further clarified:

“We will support Coincheck to provide a secure environment to customers and to grow sustainably as a socially valuable cryptocurrency exchanger.”

Also, read: Cryptocurrency Hack larger than Mt Gox Puts Coincheck in Danger

A way for traditional investors to ease into the crypto market

This acquisition will further remodel the board of Coincheck as well. Toshiko Katsuya, the senior executive at Monex will become the in charge of the cryptocurrency exchange taking the position from Koichiro Wada who will become an executive under the new management.

Reportedly, a document disclosed in the conference shows that Coincheck grew in the crypto market boom with its sales increasing from ¥123 million in 2014 to ¥77.2 billion in 2016. The existing user base and the growth of the Coincheck will help Monex Group to enter into the crypto marketspace. Having said that, the exchange will also come with inherent risks which are not only limited to the lawsuits filed against them but also a damaged brand.

Japan is already well packed with over 30 crypto exchanges and by acquiring the existing players in the market, traditional financial firms can gain entry into the crypto market far more easily than going through the registration process with FSA.

The Coincheck acquisition by Monex Group would affect not only the Japanese market but also the US market as Monex also own TradeStation, which is a US firm dealing in the online brokerage that got into bitcoin trading this year. It is a possibility that Monex would use its experience in Japan to compete in the US.

Do you think after Monex, other financial institutions will also invest their way into the crypto market? How do you think it will impact the global crypto scenario?