Japanese financial regulators have just released details regarding 23 cryptocurrency exchange platforms that have undergone on-site checks and has outlined the problems and issues found in a new report.
Japan is at the forefront of crypto legislation, so the news that regulators have been checking numerous cryptocurrency exchange platforms and other crypto-related companies is hardly surprising.
Issues found on 23 cryptocurrency exchange platforms in Japan
One of Japan’s most respected and prestigious financial regulators, the Financial Services Agency (FSA), has been running checks on some of Japan’s leading cryptocurrency exchange platforms and over 100 other companies. The regulators will use the findings to tighten its application process to review crypto exchanges in the future.
The FSA announced on Friday that its on-site checks of 23 Japanese crypto exchange platforms have unearthed some issues and problems that need attending to. Of the 23 exchanges checked, seven are fully licensed, while the remaining 16 have been deemed ‘dealers’ that are allowed to operate while the agency review the checks more.
Report details released on crypto exchange problems
The checks were administered by the FSA due to the major hacking incident at Coincheck in January, in a bid to regulate and control the Japanese crypto markets. In the report from the FSA, the regulators have outlined many problems the inspectors found when monitoring these crypto exchange platforms.
The inspection has revealed that a sloppy attitude towards the maintenance of internal control systems and the inability to keep up with the “rapid expansion of transactions” are major problems that the exchanges are facing. It was also reported that many of the crypto exchange platforms did not have the “necessary personnel for countermeasures such as money laundering was insufficient at multiple vendors.”
According to the English-speaking Japanese financial news outlet, Nikkei, the FSA will make use of their findings by utilizing the data to enhance its reviewing process for new crypto exchange applications in the future.
Registration for new crypto exchange platforms virtually came to a halt after the Coincheck incident but is now expected to be resumed. It seems that more stringent checks will be in place as the examination process tightens in the evaluation of business plans from newly-proposed crypto exchanges in Japan.
At the time of writing, there are supposedly over 100 companies waiting to become registered, and according to the Japanese news outlet, Business Insider Japan, some of these awaiting registrations include major IT companies, megabanks, massive securities firms and other major corporations. Although there have been a few applications that have already been submitted to the FSA, they have currently only gone through one round of the FSA’s application process.
Business Insider Japan was allegedly told by an FSA official that the companies wanting to be registered are instructed to read the new FSA report so it can “first compare [the findings] with the situation of their company.”
As regulatory checks for crypto exchange platforms in Japan tighten, it seems that the issues and problems raised by the on-site checks of 23 exchanges will be used to improve the market for investors.
I love everything about crypto. Simply can’t wait to see how blockchain technology changes our world for the better.