Three digital currency exchanges in Japan have been furnished with penalties by the Financial Services Authority of Japan. Further, two more have been sent notices to suspend all operations. Officials are not confident with the current practices in place to avert any sort of money laundering or systematic failure.
FSHO, External Link and Lastroots are the three sanctioned platforms that have received the lashes from the Financial Services Authority of Japan to improve business practices. This notice was a part of a broader ongoing inspection that the Japan’s financial regulator is conducting of cryptocurrency exchanges. In justification the FSA has said that the said penalties and suspension of operations are on account of unsatisfactory procedures to check money laundering and minimize systems risk.
Two of the three, FSHO and External Link have been asked to shut operations for two months. The FSA has ordered suspension of activities of External Link starting from Friday, April 6, and April 8 for FSHO, reported Reuters. Lastroots was warned to improve its practices in the same line. The full results of this investigation are to be divulged by the Finance Minister of Japan soon.
Last month, two exchanges were suspended, namely, Bit Station and FSHO (yet again). The regulator stated that the operator of the exchange was not performing all the required thorough checks on large-scale transactions and best-practices were not being followed. The Japanese press reported that Bit Station was fined for its senior officials being implicated in theft of clients’ virtual currency deposits. Similar developments have led to 4 high profile arrests in South Korea.
The FSA had announced and launched its investigation into all crypto exchanges early Febuary, which included 16 exchanges which weren’t registered at the time.
The larger push and spoke behind this inspection came after the huge Coincheck Heist in January. After this, cryptocurrency theft has become majot security issue in Japan. The regulator has decided to set up a center focused on combatting cybercrime in the country.