Published: Thu, March 29, 2018
Business | By Tara Barton

Japanese Crypto Exchanges to Shut Down

Japanese Crypto Exchanges to Shut Down

Japan's Financial Services Agency (FSA) had ordered cryptocurrency exchanges in the country to make significant improvements to their data security.

According to Nikkei, two exchanges - Mr. Exchange and Tokyo GateWay - are withdrawing their applications to operate exchanges previously filed with Japan's Financial Services Agency (FSA).

Two Japanese cryptocurrency exchanges are reportedly quitting their operations amid tighter oversight from authorities following the Coincheck hack, which saw the theft of $530 million in January. Per Nikkei's report, the closures won't occur until user funds have been withdrawn or otherwise returned. Exchange and Tokyo Gateway were among them.

Today's report suggests that three other unregistered exchange operators - Raimu, bitExpress and the now suspended Bit Station - have also withdrawn their applications to register with the FSA.

On March 8, the FSA issued month-long business suspension orders to exchange operators FSHO and Bit Station after pointing the finger at lax cybersecurity practices and inadequate money laundering measures.

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The FSA meanwhile continues to drip-feed new market players to Japanese consumers, with 16 exchanges obtaining a license since the scheme opened.

Cryptocurrency exchanges were originally required to apply for licensure starting in April of 2017, when the Virtual Currency Act was passed. Exceptions, on a provisional basis, were made for operational exchanges predating the new legislation.

However, the five cryptocurrency exchanges that have made a decision to cease operating in the country are five of the unregistered group.

It's thought that further application withdrawals will be seen, and it's believed that the FSA is giving the exchanges the chance to remove themselves voluntarily before doing so for them.

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