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Japan Unregistered Exchanges About to be Hit With Penalties

Some of Japan’s cryptocurrency unregistered exchange operators are about to be slapped with punitive measures by the Financial Services Agency, Nikkei learned on Wednesday.

 An unspecified number of them are expected to receive business suspension orders.

The agency has been inspecting the exchanges since hackers made off with 58 billion yen ($550 million) worth of NEM coins from Coincheck, a popular exchange based in Tokyo.

The heist occurred on Jan. 26.

The FSA is moving against the exchanges for being lax in regard to protecting clients and watching out for money laundering.

In addition, the FSA is set to issue a second business improvement order to Coincheck. The agency will monitor any progress the operator makes toward compensating its clients for losses.

Coincheck suspended its operations the day of the hack. It has since returned any yen its customers were holding with it but has not reimbursed its clients for their cryptocurrency holdings.

The punitive action is expected to be announced by the end of the week.

After the Coincheck heist, the agency said it would inspect each of the country’s cryptocurrency exchanges. The first phase of these inspections is now complete.

The business suspension orders will be issued to exchanges that have been operating while their Payment Services Act applications are being screened. These exchanges will be instructed to improve all aspects of their operations. Exchanges that were already registered are unlikely to be affected.

 

Asia Nikkei

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