Coincheck, a cryptocurrency exchange in Japan, has frozen all withdrawals as around $700 million disappears from its’ wallet. Within minutes of this news breaking in the Asian media, crypto markets started to tumble down with Bitcoin leading the way and from $11,600 at 06:40 UTC went all the way down to $10,200 at 08:37 UTC.
Yashimoto Akio, a Financial Advisor from Tokyo, says,
“I think we can expect the markets to continue this downtrend for the next 48 hours with Bitcoin going down to $8000 or lesser. The bigger media giants will slowly cover this news and the markets will drop even further especially once the US markets realize this.”
Bernard Tyler, a Financial Journalist specializing in cryptocurrency markets, says,
“Yes, we can expect the markets to be reactive and we will see some value being lost but as usual when normal services resume back again, the prices will regain all the value. We have seen this before when a reputed exchange in the US paused their services just earlier this month”
Coincheck released a statement which says,
“Deposits made to your account will not be reflected in your balance, and we advise all users to refrain from making deposits until the restriction has been lifted. All withdrawals from the platform are currently restricted, including JPY. Thank you for your understanding. We are doing our utmost to resume normal operations as soon as possible”
Unlike Bitflyer and Quoine, Coincheck is not registered with Japan’s Financial Services Authority. Coincheck, founded by Koichiro Wada and Yusuke Otsuka is expected to make a media statement soon with a lot of local and international news channels gathering there.
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Bitfinex/ NYAG: New York Supreme Court grants immediate stay of the document demands
Bitfinex, currently most controversial cryptocurrency exchange, announced that the New York Supreme Court Judge Joel M. Cohen granted the firms’ motion for an immediate stay on the documents demanded by the New York Attorney General. This motion was filed along with the firms’ motion to dismiss the NYAGs investigation, considering that the platform does not provide any services to the people of New York.
To add on, Bitfinex and Tether claimed that the Martin Act was not applicable to their businesses, with their main stance being that the Attorney General has failed to prove Tether as a commodity or a security. The blog post published by Bitfinex stated,
“Bitfinex and Tether filed a motion to dismiss the proceeding brought by the New York Attorney General’s office on the grounds that […] (3) the Martin Act cannot be used extraterritorially to compel a foreign corporation to produce documents stored overseas.”
However, the exchange will be required to disclose documents and information that would be “relevant to the limited issue of whether there is personal jurisdiction over the companies in New York but staying the document order in all other respects.” While one of the motions was granted, the motion to dismiss the case was scheduled to 29th July 2019.
Bitfinex further stated,
“We welcome Justice Cohen’s decision, which reflects that our motion raises significant legal challenges to the validity of the Attorney General’s actions. This order is another victory in the ongoing defence of our businesses against the New York Attorney General’s overreach […]”
In its Memorandum of Law document, the firms had clearly stated that the Attorney General would not succeed, emphasizing that the Martin Act does not apply to Tether as it covered “only transactions in ‘securities or commodities’.” More so, it stated that the Attorney General has so far failed to prove that Tether was either, claiming that the Howey Test does not apply to the coin as it is a stablecoin.
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