Coincheck, a prominent Japanese digital currency exchange service based in Tokyo, recently announced a halt to digital currency withdrawals.

Currently, all sales and purchases of every digital currency other than Bitcoin are being restricted by the platform, meaning investors are unable to trade their altcoins.

The restriction notice began with a tweet from the official Coincheck twitter, posted on January 26th 2018.

The first in the series of tweets was a sudden ‘urgent update,’ informing investors that depositing NEM (XEM), a popular digital currency, could not be conducted on the platform for the time being.

Announcements on Coincheck Twitter

In the following tweet, Coincheck also announced a halt to sales and purchases of NEM. Currently, it is unclear when investors will once again have access to their holdings, but the announcement created panic within the market.

We are currently halting deposits, withdrawals, buying and selling of NEM. Please accept our sincere apologies for this inconvenience and rest assured that we are working to resolve this issue as quickly as possible.https://t.co/4OCB0LPDuz — Coincheck (@coincheck_en) January 26, 2018

At the time of writing, NEM prices are below $0.8 USD (approximately $1.00 CAD) per coin, marking a drop of nearly -17% in the last 24 hours. The drop in price coincides with Coincheck’s announcement, which seems to have served as a catalyst for the sudden drop.

The Coincheck team posted updates on Twitter a few hours later announcing the sudden restriction to other digital currencies as well. All withdrawals, including yen, cannot currently be carried out on the exchange. This applies to every digital currency listed on the exchange other than Bitcoin, and all common payment methods are currently suspended.

Purchases and sales of cryptocurrencies other than BTC (altcoins) are currently restricted. Please accept our apologies for this inconvenience.https://t.co/4OCB0LPDuz — Coincheck (@coincheck_en) January 26, 2018

Market prices dip

Despite Coincheck stating that they are attempting to restore usual operations as soon as possible, there has been a noticeable decline in the value of many digital currencies.

Aside from NEM, a dip was also observed in the price of Bitcoin and Ripple. Bitcoin is down nearly 7% since the announcement, dropping to around $10,500 USD (approx. $12,900 CAD) per coin.

Ripple, on the other hand, experienced a dip of approximately 12% landing at around $1.17 USD per coin (approx. $1.40 CAD) since Coincheck halted withdrawals. Currently, Ripple’s price is fluctuating between spikes and pitfalls.

Contextualizing the event

Although an increasing number of institutional investors are in the digital currency market, speculation currently fuels much of the digital currency community. Japanese investors, in particular, may be extra susceptible to market panic due to the major Mt. Gox breach that occurred in 2014. Mt. Gox was a Japanese platform that was the world’s largest Bitcoin exchange, yet collapsed suddenly due to a breach that cost investors millions of dollars.

The market dip experienced since Coincheck began restricting withdrawals is further evidence of digital currencies escaping borders. These types of events have a ripple effect felt around the world, not just in their own country.

Image credit: Coincheck

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