As Japan’s authorities continue to scrutinize the country’s cryptocurrency industry, reports are suggesting that more exchanges are going to suspend operations, or even entirely shut down.
The Financial Services Authority (FSA) today issued business improvement orders to six other exchanges, including bitFlyer, which handles nearly $2 billion a day. The other exchanges that were slapped with a business improvement order are QUOINE, Bitbank, BTCBOX, BITPoint Japan and Tech Bureau.
The news comes as Japan’s watchdogs continue to challenge exchanges to prove their security credentials in the wake of Coincheck’s $530 million hack in January. The huge scale of recent hacks led the regulator to begin on-site inspections on all cryptocurrency operators, which then revealed a host of problems with security, corporate governance, and internal controls.
Several crypto venues have opted to exit the Japanese market as a result of FSA inspections and requests, as they thought they would be unable to meet the regulator’s endless demands.
Did COVID-19 Save the Forex Industry?Go to article >>
However, many cryptocurrency enthusiasts look at Japan’s crackdown as a sign that the country is building an environment in which they can feel safe in pumping their investments and store crypto assets with these exchanges.
Japan has long been seen as a global cryptocurrency capital, with trading volumes on its local exchanges reaching dizzying heights. With the exponential increase in prices last year, the number of market participants also ramped up.
Overall, 2017 was a watershed year for the virtual asset class in Japan. A recent survey by Japan’s Financial Services Agency (FSA) confirmed that just under 3.5 million investors had holdings in at least one cryptocurrency.
Commenting on the FSA sanctions, bitFlyer apologized to its users and said that its management understands “how serious these issues are,” as well as how serious they are in “responding to them going forward.”
The exchange added in its statement: “In order to maximize our efforts towards building a suitable service and improving on the issues identified, we have temporarily suspended account creation for new customers of our own volition. We apologize for any disturbance or worries imposed on our customers by these actions.”