Monex has officially signed a deal to acquire Coincheck ending weeks of speculation. The deal is reported to be worth $33.5 million. The deal now gives a lifeline to the exchange that was hacked in January.
This confirms rumours about the acquisition that have been floating for sometime now.
In the deal signed on Friday, Monex Group, a financial services firm will acquire all 1,775,267 shares. Coincheck CEO and founder Koirchiro Wada and COO Yusuke Otsuka will step down on April 26 when the transfer of shares will be completed. The two have previously owned up to the devastating hacking.
Coincheck lost $530 million worth of NEM token in January during the attack, making it the largest heist in the history of the market.
Wada has a stake of 45.2% in Coincheck.
Monex COO Toshihiko Katsuya will take over as president while Monex Group president Oki Matsumoto will be joining Coincheck’s board.
The acquisition will now allow Monex to enter the lucrative cryptocurrency market as it tries to match with rivals like SBI Holdings.
“The cryptocurrency exchange business plays a core part in a vision of “MONEX’s new beginning”. Therefore, the Company has resolved on 100% share acquisition of Coincheck which has been a pioneer among cryptocurrency exchanges,” Monex said in a statement.
The deal will give it access to Coincheck’s wide base of customers.
Monex Group is the fifth largest brokerage in Japan with a market capitalisation of 120 billion Japanese Yen. Its shares rose 23% after rumours about the acquisition went round earlier this week.
The announcement of the deal on Friday saw its shares climb 20%. Reuters reports that Coincheck generated sales of $9.1 million and an income of $4.4 million in the year ended March 2018.
“We recognize blockchain technology and cryptocurrencies as next-generation technologies and platforms which are likely to drastically change the way people approach money,” Monex said in a statement.
The company will now focus on building a secure trading environment for its customers drawing from its expertise in systems risk management, business management and asset protection.
IPO in the Works
Monex is said to be planning an IPO on Coincheck’s shares in future in what would be a first for the industry.
Coincheck recently announced it had completed making compensations to its customers who lost their assets during the hack. The compensation was made from its own funds.
The hacking in January set off a series of crackdowns on cryptocurrency exchanges in Japan.
Several exchanges have since been penalized for lax security and management controls. At least two exchanges were suspended for a month. Others have elected to shut down voluntarily in the wake of the increased scrutiny from the regulator.
Coincheck was one of those ordered to increase its security and put checks on money laundering.
The regulator will continue making inspections on Coincheck even after the company changes hands, an official has said.
Japan remains a vibrant location when it comes to cryptocurrency trading accounting for a huge part of global transactions.
Companies still see a huge prospect of the market growing. Linecorp, a mobile operator is also lining up for a license to operate a cryptocurrency exchange.