Japan’s Financial Watchdog Continues Crypto Exchange Clean-Up

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  • Japan’s FSA issues business improvement notices to BITPoint Japan, Bitbank, Quoine, BitFlyer.
  • “Not in position to comment”, said BitFlyer in the wake of the notice.
  • New measures come about in the wake of exchange security breaches earlier in the year.

Japan is without question a forward-thinking, cryptocurrency accepting country. Leading the world when it comes to Bitcoin adoption, the sheer scale of progress Japan has made when it comes to integrating Bitcoin into daily life is astounding. Part of the reason behind this electric progress is how the government polices the exchange market. We’ve previously looked at Japan’s cryptocurrency crime crackdown, along with how new regulatory measures have seen some exchanges up roots and leave. In spite of resistance, Japan is continuing its crypto exchange clean-up by issuing business improvement notices to five registered exchanges.

FSA Ramps Up Inspections

FSA inspections in Japan have become notoriously strict – as the governing body is attempting to streamline security measures. Following the latest round of inspections, BITPoint Japan, Bitbank, Quoine, and BitFlyer have all been issued with notices regarding business performance. These notices detail a lack of proper internal management systems, with money laundering prevention practices also being questioned. Bitbank, Quoine, and BitFlyer currently rank as the 20th, 27th, and 18th biggest cryptocurrency exchanges in the world.
Many exchanges remain reluctant to speak on the business improvement notices, with BITPoint Japan and Bitflyer knocking back reports. BITPoint Japan specifically states that there is “no such fact at the present time,” with Bitflyer stating that they’re “not in a position to comment.”

Bringing the Exchange Landscape Under Control

It shouldn’t surprise anyone to hear of Japanese governing bodies increasing policing of crypto exchanges. The county has had a rough time of things when it comes to hacking and security breaches. In January, the world was stunned to hear of a $532 million hack of Coincheck, one of Japan’s biggest crypto exchanges. There have also been several smaller hacks occurring throughout the country. Collectively, these have called security measures surrounding exchange operation into question. The FSA has stepped up in recent months, as through freezing operations and business improvement notices it’s doing what it can to pull exchanges into line.

Japan is Serious About Security

Since April last year, Japan has operated an extensive licensing system. It rejected a license application for the first time in June. The reasons for the rejection related to prior exchange suspensions, plus a lack of customer verification in the case of suspicious transactions. Japan wants to be seen as a secure hub for all things crypto, with the FSA’s latest measures going a long to way make sure that’s the case.