Coincheck Reports Deepening Losses of $5.3 Million in Third Quarter
Coincheck reported a pre-tax loss of 588 million yen (US $5.3 million) for the third quarter of 2018, the Japanese exchange’s second consecutive quarterly loss since hackers pilfered $530 million in January. That’s an increased deficit of 130 percent from the 259 million yen ($2.3 million) loss the previous quarter.
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Coincheck Remains Optimistic After Surviving a Multi-Million-Dollar Hack
Coincheck’s revenue for the period July to September plunged 66.5 percent to 315 million yen ($2.8 million) from $8.4 million the previous quarter, as the exchange battled to regain public trust. Attributable net loss widened 111 percent to $3.6 million during the review quarter, as total group net profit came in at $4.9 million, down 118 percent from $10.7 million in the quarter prior.
Coincheck, acquired by Tokyo-based securities firm Monex Group in April for $40 million, said that it retained some 1.7 million users after repaying $420 million to depositors after the hack. Running costs are down by around 17 percent for the quarter, but cumulative losses over the past six months have reached $7.6 million.
“Since the service suspension in January 2018, Coincheck basically allowed existing customers only to sell their cryptocurrency,” Monex Group said in its third quarter earnings release on Oct.29.
Exchange Steps up Security
Lawsuits filed against Coincheck, still unregistered under Japanese law, have had only a minor impact on the financial status of the holding company, Monex said, adding that the exchange had beefed up security to prevent further breaches. At least four privacy coins have been delisted as part of measures to improve security. Know-your-customer and anti-money laundering features have also been tightened.
“Going forward, Coincheck will advance as a highly technology-driven company with a cutting-edge security control system and the know-how to secure profitability appropriate of its true value,” Monex Group chairman and chief executive officer Oki Matsumoto detailed in the financial results statement.
“In Japan and the United States, we will increase our user base by developing and providing new services that appeal to millennials and other new economic players. And finally, we will expand our operations in the Asia-Pacific region, an area that will support global growth in the future,” he said.
The majority of leading digital currency exchanges have reported stellar earnings. Binance said profits soared to $350 million between September last year and June, mainly driven by transaction fees. The platform, which has over 10 million users and averages about $1.5 billion in daily volume, has targeted net profit of between $500 million and $1 billion for 2018.
Do you think Coincheck will be able to regain public trust after the January hack? Let us know in the comments section below.
Images courtesy of Shutterstock and Monex Group.
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