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Japan

Japanese Regulatory Authorities to Punish Some Cryptocurrency Exchanges

· 08 Mar 2018 in Cryptocurrency News, Home
Carlos is an international relations' analyst specializing in cryptocurrencies and blockchain technology. Since 2017, Carlos has written extensively for UseTheBitcoin and other leading cryptocurrency sites; with over 2,000 articles published.

Japan is again in the middle of a storm after the Japanese Financial Services Agency (FSA) sent “punishment notices” to seven cryptocurrency exchanges. Furthermore, the FSA has temporarily halted the activities of other two exchanges after their inspection.

Japanese Regulatory Authority Takes Action

In general, Japan has had a very friendly position towards cryptocurrencies and businesses of the sector. But the Japanese-crypto peace seems that it has arrived to an end. Since the Coincheck hack happened, Japanese authorities have taken several measures to regulate the market. 

The FSA has decided to inspect some cryptocurrency exchanges so as to have under control Anti Money Laundering (AML) and Know Your Customer (KYC) policies. After the inspection, the FSA has issued business improvement orders due to the lack of control and transparency in some of the exchanges.

For example, Coincheck, did not comply with AML requirements. Additionally, the crypto exchange lacks for a system to prevent terrorism financing activities.

The information has been released by a senior official at the FSA. He told reporters that Coincheck will reimburse its customers. The company would announce the details of the reimbursement plan in the next hours / days.

Coincheck Reimburses Customers

At UseTheBitcoin we wrote that Coincheck will reimburse the investors who lost their NEM during the hack. This is in line with what the FSA has commented to the media.

On January the 26th, the company announced it has been hacked by 523 million NEM (XEM), which were worth $500 million dollars. In a statement released some days later, they explained that they are going to refund their customers.

The company wrote:

“We realize that this illicit transfer of funds from our platform and the resulting suspension in services has caused immense distress to our customers, other exchanges, and people throughout the cryptocurrency industry, and we would like to offer our deepest and humblest apologies to all of those involved.”

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