Japanese financial regulator has completed on-site inspections of 23 cryptocurrency exchanges. They also found many problems and issued a problem check report. It is reported that the Japanese financial regulator will restart the cryptocurrency exchange new application review process based on the results of this survey, but the review may be further strengthened - there are already more than 100 companies awaiting review.
Japan Financial Services Agency announces on-site inspection results of 23 cryptocurrency exchanges
The Japan Financial Services Agency (FSA) is Japan's top financial regulator, and on Friday (August 10) they announced the results of on-site inspections of 23 cryptocurrency exchanges in the country. Only 7 of the 23 cryptocurrency exchanges are fully licensed, and others are considered “dealers”. These “dealers” are allowed to conduct business operations when applying for a license and accepting a review by the Japan Financial Services Agency. of. However, after the hacking of CoinCheck in January this year, the Japanese Finance Agency began to check these cryptocurrency exchanges.
In addition to disclosing relevant information, the Japan Financial Services Agency also issued an interim report outlining a series of issues discovered during the inspection and monitoring of cryptocurrency exchanges, according to the Nikkei News:
“The results of the inspection showed that many cryptocurrency exchanges were more sloppy, their internal control system could not keep up with the rapid expansion of trading volume, and there was no risk assessment for each virtual currency... In addition, anti-money laundering was implemented. At the time of the strategy, the staffing of these cryptocurrency exchanges was also insufficient."
The Japan Financial Services Agency also found that the total assets of the country's cryptocurrency exchanges expanded sixfold in just one year, while many exchanges have fewer than 20 managers and employees, that is, each person needs The average asset under management is about 33 yen (about $30 million), which has raised concerns among regulators.
Look forward
The Japan Financial Services Agency hopes to fully consider the results of this inspection when reviewing the application of the new cryptocurrency exchange. They have not approved any cryptocurrency exchange since CoinCheck was hacked. According to reports, the Japanese Finance Agency is currently reviewing three companies, including CoinCheck. The Nikkei News stated:
“After the CoinCheck incident, the Japan Financial Services Agency has actually stopped approving cryptocurrency exchanges, but it is expected that this situation will soon be resumed. After that, the Japan Financial Services Agency will increase its review efforts, such as assessing the effectiveness of business plans and internal sites. Control system, etc."
At this stage, more than 100 companies are awaiting approval from the Japan Financial Services Agency, including large banks, major IT companies and securities companies