Japan tightens rules for registering crypto exchanges
The Financial Services Agency (FSA) of Japan has revised its rules and procedures for registering cryptocurrency exchanges. The FSA will “tighten up the registration process” for companies that have applied but have not yet received approval. Companies whose applications are pending (they are called “quasi-operators”) are allowed to operate for the time being. Writes about this Bitcoin.com with reference to local media.
For companies that have already passed the initial examination process, the FSA, according to Sankei Shimbun, “will continue to work with them through on-site inspections.”.
“The policy of the FSA is that if, according to the results of inspections, the exchange does not demonstrate any improvements in its work, then the department will expect it to withdraw the application,” the newspaper writes..
This process should help prevent a repetition of the Coincheck hack – the exchange filed an application for registration last September and operated as a “quasi-operator”. A few days ago it became known that Coincheck was acquired by the Monex Group.
The FSA decided to tighten the rules after it checked all quasi-operators and found a lot of security breaches on a large number of exchanges. Subsequently, five companies withdrew their bids and some exchanges were ordered to cease their activities. In addition, according to news agency Jili Press, on Friday the FSA said another exchange, Campfire, had also “expressed a desire to withdraw its registration application.”.
The FSA has also reviewed the listed exchanges, including Quoine, Tech Bureau and GMO Coin. Tech Bureau and GMO Coin received an order from the FSA to improve business processes. “We mainly review the user protection system, an audit function that cannot be judged by reports alone – regardless of whether they are doing corporate governance by the proper separation of management and work,” explains FSA.
As noted by Sankei Shimbun, at the moment more than 100 companies are awaiting the FSA to obtain a license for cryptocurrency exchange activities. Among them, in particular, Line Corporation, which owns one of the most popular messengers in the world – Line.