Japanese Regulators Slap Exchanges' Wrists For ID Check Compliance

The Japanese cryptocurrency regulator agency, the Financial Services Agency (FSA) has ordered security and identity confirmation improvements to six registered exchanges, in an attempt to strengthen the agency requirements to avoid the use of their platform for money laundering and crime funding purposes. According to Nikkei Asian Review, most of these exchanges’ identification procedures are lax and easy to overcome.
The six exchanges to whom improvements orders were sent are Quoine, bitFlyer, Bitbank, BITPoint Japan, BtcBox and Tech Bureau. These improvements orders were issued after regulator poking into their systems, and every one has individual requirements to fill for every different exchange.
In response to this improvements orders, some exchanges have stated that they won’t open new trading accounts till their platforms are able enough to comply with the regulator’s new policies. That is the specific case of bitFlyer, the twentieth most important exchange in trading volume worldwide, that voluntarily closed new trading appliances to focus their workforce on complying with new regulations.
The improvements orders issued by the FSA were emitted due to the poor capability of their platform to detect money laundering associated transactions and report these movements to the authorities. Some experts have criticised heavily the posture of cryptocurrency exchanges and demanded heavier controls and regulations, a thing that the FSA has heard and taken into account.
The Japanese regulator has been tightening controls and making regular checks to every exchange since last January when Coincheck, a local exchange, was hacked and more than 500 million dollars worth of NEM (another cryptocurrency) were stolen from the customer accounts.
Since then some exchanges have withdrawn their applications to operate on Japanese soil, due to the increasingly tight security measures that they would have to implement to comply with the FSA requirements. Kraken, an American exchange announced last month that they would be shutting their operations there due to the high costs of operating in Japan.

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