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Cryptocurrency

Bitcoin plunge deals blow to Coincheck's turnaround plans

Hacked crypto-exchange says trading remains weak after resuming operations

Tokyo-based cryptocurrency exchange Coincheck is having trouble winning back business following a 58 billion yen heist in January.

TOKYO -- Falling bitcoin prices have dented hopes for a revival of trading at Japanese cryptocurrency exchange Coincheck, its top executive said on Wednesday, as the company tries to turn its business around after it suffered one of the biggest thefts in history.

The price of bitcoin is hovering at about $3,300, according to CoinDesk, down by nearly half versus a month ago and more than 80% below its peak in December 2017. The slide has poured cold water on Coincheck's efforts to revive its fortunes after 58 billion yen ($511 million) worth of cryptocurrency was stolen in January, an incident that triggered regulatory crackdown on the industry.

"We hope to see trading volume rise as we run [the exchange] in a stable way," Coincheck's President Toshihiko Katsuya told reporters. "But the market is weak. Volatility is high, but transaction activity has not been revitalized."

Coincheck on Nov. 26 resumed all services that were halted in the wake of the theft, including trading of tokens and opening new accounts. The company has yet to secure a license from the Financial Services Agency, but operates while awaiting approval. Asked if the approval is taking longer than expected, Katsuya said, "In our view, yes."

In addition to a market recovery, a green light from regulators is key to Coincheck's plans to step up its marketing. Coincheck, which was purchased by financial services group Monex Group in April, generated hundreds of millions of dollars in operating profit before the theft, but has since been losing money.

For the six months ended September, Monex's crypto-asset division reported an 8 million yen net loss due to sales and administrative costs. Katsuya said Coincheck has more than 60 engineers.

Katsuya said "competition will intensify" in 2019 as more players enter the market. Coincheck plans to expand its services beyond trading into areas such as payments and transfers.

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