Japan’s Financial Service Agency Suspends Two Crypto Exchanges

After the biggest hack of Coincheck exchange earlier this year, the Japanese regulatory body - The Financial Service Agency (FSA) - has been keeping a strict check on the operations of crypto exchanges making it sure that they follow all the security protocols.

After a series of inspection over the last two months, the regulatory body has recently imposed a suspension order for two local crypto exchanges while sending a business improvement notice to seven others, including Coincheck.

As per the local publication Nikkei Asian Review, it was found that two crypto exchanges - FSHO and Eternal Links failed to deliver of taking action for preventing money laundering and minimizing the system risks. As a result of this, the regulatory agency decided to take action and has suspended them for a period of two months.

Over the last two months, since the Coincheck hacking incident took place, the Japanese regulatory body has been in swift action while monitoring and scrutinizing all the functional practices of the exchanges.

However, this is not for the time that FSHO has received such an order from the FSA. Last month in March, the agency had suspended the crypto exchange along with BitStation till April 7. However, it seems that the FSHO has still not been able to convince the FSA in its improvement to which the agency seems to have extended the ban for next two months.

The FSA has complained that the exchange has failed in performing thorough checks on large-scale transactions and failed to implement necessary measures “to run the exchange in a decent and assured way”.

On the other hand, the FSA told that BitStation was penalized on the charges of its senior official being implicated for embezzlement of the customer’s crypto deposits. A similar such case has been recently reported from South Korea wherein the executives have been charged with fraud and embezzlement.

Soon after the Coincheck hack in late January, the FSA found during its check that 16 crypto exchanges have not got licensed or registered with the agency.

With the increased investor participation following the unprecedented run of the crypto markets last year, there have been increasing reports of online hack and theft. In order to combat this, the Japanese authorities have decided to set a dedicated center wherein 500 investigators and analysts from country’s law enforcement agencies have said to join in.