Mr. Exchange and Tokyo GateWay Cryptocurrency Exchanges Based IN Japan To Shut Down

Two Japanese cryptocurrency exchanges, namely Tokyo GateWay and Mr. Exchange are reportedly planning to terminate their operations in China due to a falling out with regulators. The two cryptocurrency exchanges are exiting just two months after the theft of cryptocurrency worth $533,000 in January this year.

Tokyo GateWay and Mr. Exchange have reportedly withdrawn the applications that they had filed with the Financial Services Agency (FSA) in Japan. The two exchanges had reportedly been seeking approval to provide services to the local market. The Japanese regulatory authority has lately been employing strict measures aimed at encouraging crypto exchanges to employ more security measures to prevent hacks such as the one that affected Coincheck in January. The attack led to the loss of NEM tokens worth roughly $533,000.

Neither of the two exchanges has published official statements regarding the matter, although there have been reports that the FSA ordered the two exchanges on March 8 to enhance their data security measures because the security measures they had been using at the time were not adequate. Tokyo GateWay and Mr. Exchange are expected to reimburse their customers before the close down their operations in the country.

The FSA has been regulating crypto exchanges since April last year after a law was instituted requiring exchanges to register with the regulatory authority. So far about sixteen crypto exchanges have complied with the law and another sixteen operators were allowed to run their operations pending review. It has also been reported that five exchanges of the 16 that were awaiting regulatory review and approval have decided to exit the business.

Reports also claim that the Japanese regulator has also suspended Bit Station and FSHO exchanges, allegedly due to flaws in their security measures. News reports claim that more cryptocurrency exchanges in Japan are expected to terminate their operations and perhaps even exit the market in the future as the FSA enforces strict regulatory requirements.

So far most of the problems that have been uncovered in most of the exchanges by the FSA have to do with internal control and corporate governance. Some of the exchange operators feel that they will have a tough time meeting the strict standards that have been set by the operator and thus the decision to exit altogether. The Japanese regulator has also given the exchanges the freedom to choose whether to exit by their own accord before they are given the order to do so.