Crypto Exchange Coincheck Made $491 Million Profit Prior to Hack

Hacked cryptocurrency exchange Coincheck made 53.7 billion yen ($491 million) in profit for the fiscal year ending in March, according to financial data released on Thursday by parent company Monex.

The exchange, which in January succumbed to a record-setting hack that saw the attackers make off with $530 million worth of NEM tokens (XEM), raked in 62.6 billion yen ($573 million) in revenue, against just 8.8 billion ($8.1 million) in ordinary operating expenses.

Most of that profit occurred during the 10-month period prior to the hack, as the platform was only partially functional in February and March. Even so, the exchange made more than 500 million yen ($4.5 million) in operating income over this two-month span.

Remarkably, the exchange made a net pretax profit of 6.3 billion yen ($57.6 million) for the fiscal year, even after paying users 47.3 billion yen ($432 million) as compensation for losses they incurred as a result of the hack.

Japanese brokerage firm Monex Group acquired Coincheck in the wake of the hack, paying about $34 million for the disgraced exchange. One reason for the low sum is that it appeared unlikely that the country’s Financial Services Agency (FSA) would grant the company a license under its previous management structure.

Monex has said that it is now planning to launch its own blockchain to manage financial product trading. Notably, it also intends to hold an initial coin offering (ICO) for the platform.

Bloomberg notes that Japan Exchange Group — the operator of the country’s largest stock and derivatives markets — made 71.8 billion yen during the fiscal year that ended in March. Had Coincheck not been hacked, it is possible that it would have posted comparable profit figures.

As CCN reported, Binance — the largest exchange in the world according to self-reported trading figures — made more profit in Q1 2018 than Deutsche Bank. The German banking giant was established 148 years ago; Binance launched less than eight months ago.
Sourced:https://www.ccn.com/crypto-exchange-coincheck-made-491-million-profit-prior-to-hack/