Company: CNCKW
Filing Date: 2025-03-27
Form Type: F-1/A
Source: 0001013762-25-003470
Chunk: 54

Company: Coincheck Group N.V.
Filing Date: 2025-03-27
Form: F-1/A
Chunk 54
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 NEM, or ¥46.6 billion, of customer funds. Although we compensated customers who were adversely affected by this cybersecurity incident, we were subject to lawsuits relating to the calculation of the compensation provided. Some of these lawsuits have been resolved by judgment or alternative dispute resolution, but as of December 31, 2024 there is one remaining lawsuit demanding approximately ¥5million. After evaluating the remaining claims and the potential outcomes with external advisors, we have determined not to provide a litigation reserve with respect to these remaining claims. Although we have subsequently invested in strengthening our cybersecurity and have become subject to operating procedures, including regulations for the custody of customer crypto assets, subsequently implemented by the JVCEA as described under “ Business — Our History,” any future failure to safeguard our customers’ crypto assets could have significant adverse effects. On May 31, 2024, Japanese crypto exchange operator DMM Bitcoin announced that it had lost 4,502.9 Bitcoin (approximately ¥48.2 billion) of customer assets held in cold wallets as a result of a hacking incident in which such assets were transmitted outside of the company through an “unauthorized leak.” As a result, on September 26, 2024, Japan’s Kanto Local Finance Bureau issued a business improvement order to DMM Bitcoin which required DMM Bitcoin to, among other things, investigate the root causes of the incident, adequately compensate affected customers and improve the risk management systems of the company. On February21, 2025, Dubai -basedcryptocurrency exchange Bybit announced it had detected unauthorized activity related to ETH cold wallets, and this sophisticated attack led to the transfer and possible loss of over 400,000 ETH worth approximately $1.5billion. If new rules regarding wallets for customer assets held in custody are introduced in Japan in response to such incidents, this could result in an increase in our security -relatedexpenses, including an increase in insurance costs if we decide to take out an appropriate insurance policy in the future. In addition, potentially increased frequency and scrutiny surrounding inspections of crypto exchange service providers by the relevant regulatory authorities may cause delays in the promotion and advancement of planned business initiatives, resulting in lost opportunities. This incident, and incidents similar to this, could result in a general reduction in customer activity or an increase in withdrawals of customer assets on Japanese crypto exchange platforms, including ours. As of December 31, 2024 we recorded 28 ¥1,034 billion of safeguard liabilities on our statements of financial position with respect to the obligation to safeguard our customers’