You are using an outdated browser.

Please upgrade your browser for a better user experience.

UPGRADE BROWSER

BY Fintan Ng - October 30, 2018

News 0

Coincheck exchange’s losses widens in Q2

Coincheck’s pre-tax loss widens from slump in transaction fees
A+ A-

Monex Group, the Japanese financial services firm that acquired crypto exchange Coincheck in April, revealed in the company’s second quarter ended Sept 30 financial results that losses at the exchange had widen after trading was curtailed.

Coincheck was acquired by Monex in April after the exchange lost US$530mil in a hack in the beginning of the year.

The Tokyo Stock Exchange-listed Monex says in a filing that Coincheck posted a pre-tax loss of US$5.33mil for the second quarter, a pre-tax loss that had doubled from the previous quarter.

Since services were suspended in January following the hack, Coincheck only allows for the sale of cryptocurrencies by existing customers but is working on resumption of full services.

That has resulted in declining transaction fees, which also saw the exchange’s operating revenue fall to US$2.66mil, down two-thirds from the previous quarter.

Monex says that lawsuits filed against Coincheck have had only a minor impact on its financial status “as of today”.

The company believes that the exchange, which has approximately 1.7 million mostly younger investors, have potential to grow.

Monex says the exchange will expand the company’s customer base by attracting younger customers while the exchange’s financial assets and transactions per user are likely to increase over time.

It says the path to the exchange’s profitability and true value lies in being a highly technology-driven platform with a cutting-edge security control system and know-how.

It sees the company’s existing traditional financial services businesses being fused with the new tech-driven businesses to form a new financial conglomerate.

The new financial conglomerate has four potential outcomes, namely, innovation through the utilisation of blockchain technology, a payment service using crypto, crypto asset banking and, crypto as a trading asset.

Monex adds that the exchange has made major improvements to governance, internal control and audit since being slapped by a business improvement order in March by the Financial Services Agency (FSA), the Japanese financial regulator.

While aiming to grow the crypto business, it acknowledges that as of September, the FSA has yet to approve the registration of the exchange.

For the second quarter, Monex posted a two-thirds drop in net profit to US$4.87mil compared to the same quarter of a year ago.

Operating revenue minus financial expenses saw a slight decline to US$101.97mil.

In a separate announcement dated Oct 30, Monex says that customers can now deposit and purchase some cryptocurrencies.

It is resuming “new account openings” in a short statement, without elaborating.

Image courtesy of Coincheck website.

0

SHARES

SHARE THIS ARTICLE :

COMMENTS 0

Submit your comments