Japanese regulator the Financial Services Agency (FSA) will hit some of the top exchanges in the country – including BitFlyer – with business improvement orders in the coming days, per multiple media reports.
If the exchanges fail to make significant improvements to their management systems, they could face suspension or yet stricter measures.
Reports suggest that, in addition to BitFlyer, the country’s largest trader by volume, Bitbank and Quoine, also market leaders, could face sanctions, with BITPoint Japan and BtcBox also in the firing line.
Japanese cryptocurrency consultant Takahashi Sato told Cryptonews.com, “The FSA looks like it really means business after rejecting FSHO’s license. I wouldn’t be surprised if exchanges didn’t move fast to rectify whatever it is they are doing that is irking the FSA. They can see what the consequences might be if they don’t fall in line.”
Per Asahi, the FSA is expected to say that the five exchanges have failed to improve their management systems according to the Payment Services Act, which was revised in April this year in the wake of the Coincheck hack incident. Some reports also suggest that the FSA wants the exchanges to shore up their anti-money laundering operations.
Other major exchange operators, including Osaka’s Tech Bureau, have previously received similar improvement orders – while the FSA recently threw out long-time exchange operator FSHO’s application for a license.
The news will come as a major blow for all five exchanges, particularly BitFlyer, whose CEO is the vice chairman of the Japan virtual currency association (JVCA). The JVCA this week unveiled a set of proposed guidelines on anonymous trading, money laundering and market manipulation as it seeks official FSA recognition as a self-regulating body. BitFlyer has also poured millions into investments and partnership deals of late, and offers crypto-pay options at a range of stores, websites and businesses around the country.
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