The Japanese Financial Services Agency (FSA) the team behind the new exchange regulation movement, are allegedly imposing further restrictions on a number of exchanges within Japan, who are failing to meet up with their new, strict regulations.
Japan have really been one of the first countries to adopt a regulation scheme that allows for cryptocurrency trading to exist, under an umbrella of very tightly controlled cryptocurrency exchanges. The aim of this, is not to hamper the industry, rather, it is to encourage cryptocurrency activity through a safe and moderated environment.
Within this latest news, the Nikkei Asian Review have reported that the FSA have imposed ‘business improvement orders’ on six cryptocurrency exchanges that act as a reminder of the strict regulations imposed by the FSA. The exchanges in question are;
- BITPoint Japan
- Tech Bureau
According to Nikkei Asian Review:
“The FSA ordered the six exchanges to improve business operations after raiding their offices and determining they could not cope with the rapid expansion of the virtual currency market. Their internal controls were inadequate, and they had not done enough to address concerns such as money laundering, the FSA said.”
“There are currently 16 registered cryptocurrency exchanges that have passed the FSA’s inspections concerning customer asset protection systems, among other things. The FSA’s announcement on Friday means about 40% of registered exchanges in the country have been punished.”
You can read the full article for yourself, here-
Of course, this follows news of two very recent exchange hacks in South Korea which has seen around $70 Million worth of digital assets stolen from Coinrail and Bithumb.
Assuming the exchanges in question are able to improve their standards, the FSA will allow them to continue to trade. As it stands, we are not sure quite yet what these standards entail, nor do we understand if there have been any deadlines set by the FSA.
Moreover, if the FSA standards are not met, we can only expect that these exchanges are forced to cease trading. Given that there are only 16 registered exchanges within Japan, a loss of 6 of these would certainly close up the ‘exchange market’ so to speak, which in turn could have a big impact on the markets.