Japan’s finance regulator, the Japanese Financial Services (FSA), has assessed the cryptocurrency market in Japan, stating that the actual conditions are not sustainable, in particular after the Coincheck’s hack. Therefore, due to the security issues found in number of crypto exchanges, Japan’s regulator has prepared a revision of the entire industry.
The FSA has improved the regulation for cryptocurrency exchanges, based and active in Japan, focusing on the procedures and basis for exchanges’ approvals, according to the Japan’s Sankei Shimbun. As the newspaper informed, FAS is about to put its efforts to make the registration review of crypto companies adequate to avoid previous issues. Now, there are exchanges that have applied for registration, but they are still not approved yet, so they could face stricter rules from now. They operate only under review, waiting for the FSA’s verdict.
Nevertheless, granting the approval does not mean that it’s over for the company. Regulator is allowed to perform on-site inspections, so the supervision over the market will be permanent.
Thus, FSA is trying to avoid a situation of Coincheck when hackers caused losses to number of consumers in Japan in September 2017, bringing the truth of inadequate security out. Coincheck pledged to pay the traders and was acquired by Monex.
The FSA has performed on-site inspections of cryptocurrency exchanges after the Coincheck’s troubles, imposing even penalties to some of them for not improving their security system. Some have also withdrawn their applications, not confident about being able to comply with the new regulation while the other were forced to stop any business activities in the industry.
Since the hacker’s attack, FSA turned the attention from regulatory legal requirements in general to consumer’s protection as the consumers are still considered as being one of the most vulnerable elements of the economy. However, even these new measures do not seem to stop other companies with their intentions to join the industry. According to Sankei Shimbun, more than 100 companies are about to enter the business.
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