Japan's financial market regulator took action against virtual currency exchange operator Coincheck with a business improvement order.

The Financial Services Agency ordered the crypto exchange to strengthen internal controls and take measures to prevent similar incidents. The heist of Coincheck's virtual currency is now recognized as the largest ever theft of digital currency. The metropolitan police department has also opened an investigation into the incident. 

The Tokyo-based firm announced on its website it would be making reparations to the approximately 260,000 users affected by the illicit transfer but details of the reimbursement remain sketchy. Japan's financial watchdog is expected to lay out further penalties and place trading conditions for the crypto exchange.

Japan is building its status as the leading global hub of cryptocurrency trading and innovation adding overseas players to the growing pool. In a country however where for generations cash has traditionally been king, confidence in the digital segment took a hit with crypto prices falling.