The Japanese Financial Services Agency (FSA) has made strict orders that two of Japan’s cryptocurrency exchanges must halt trading immediately after failing know-your-customer (KYC) licensing adherents.

These business suspension orders are expected to last until early June; the FSA has additionally issued Eternal Link and FSHO with penalty orders.

In early March, the agency suspended 15 unlicensed crypto exchanges. The country’s financial services minister Taro Aso had mentioned that on-site inspections would take place at the headquarters of the exchange providers. The strategic plan came after the Coincheck exchange hack, during which USD 533 million in NEM tokens had been stolen in January.

Though the suspension of the 15 exchanges had slowly been clearing up through many weeks of inspections, the FSA called out to the two leading service providers for not obtaining the right customer details before allowing them to trade.

Also, the exchanges had not been keeping track of suspicious transactions and reporting back to the agency. Anti-money laundering procedures must be adhered to in the cryptocurrency ecosystem; the failure of such does not comply with Japan’s Act on Prevention of Transfer of Criminal Procedure.

In another FSA report, it had been shown that Eternal Link had also violated other laws, using customer deposits to pay for company expenses. A spokesperson for the FSA commented that three more exchanges were lacking in proper security measures, leaving them open to some data breaches.

The recent suspension shows that regulatory measures are being put in place in Japan, with the FSA strengthening its efforts in cracking down on errant cryptocurrency exchanges and measuring their business operations.


Comments are closed.

Check Also

HSBC and ING Announce Successful Utilization of R3’s Blockchain Platform

HSBC and ING bank have recently reported that they have utilized blockchain technology usi…