The FSA has officially announced that it will require six Japanese exchanges to make significant changes to their platforms. These requirements were sent to each respective exchange in the form of Business Improvement Orders. Their purpose is to tighten up anti-money laundering controls and prevent fraudulent activity in general.
Japan is still firmly restraining exchanges
The FSA’s decision to tightly monitor and control Japanese exchanges should come as no surprise. Not long ago, the regulatory body was discussing a possible ban on specific privacy coins. Ever since the Coincheck hack, which resulted in a theft of over $500 million, the FSA has been stringent in the way it patrols its Japanese exchanges.
How have exchanges reacted?
As a result of these Business Improvement Orders, the exchange BitFlyer has released a statement explaining that they will be temporarily shutting down to try and solve these issues. The statement reads: ‘Our management and all employees are united in our understanding of how serious these issues are. In order to maximize our efforts towards building a suitable service and improving on the issues identified, we have voluntarily and temporarily suspended the onboarding of new customers‘. BitFlyer users will need to sign up again if they wish to continue once the exchange returns to being active.
So far, none of the other Japanese exchanges targeted by the FSA have chosen to pause their functions. Among those singled out are Bitbank, Quione, and Tech Bureau Corp. While BitFlyer has no intention of closing altogether, this is still an ominous sign that the FSA may be scaring away exchanges from the country. For the most of 2018, Japanese exchanges have been struggling to function due to the tight regulations.
The requirements that the FSA is asking for mostly revolve around anti-money laundering and KYC measures. It’s not the first time that the organization has punished exchanges. The FSA has now sanctioned or warned at least 40% of all registered Japanese exchanges.
Kai is a cryptocurrency copywriter and professional trader. He can often be found investigating various cryptocurrencies, whitepapers, and blockchain technologies. Kai has been a professional writer for 5+ years, and has invested in 50+ different coins and tokens. He also currently studies Law and Philosophy at university.