Japan’s FSA Publishes Exchange Inspection Results
The Japanese Financial Services Agency has published the results of several inspections into 23 different digital currency exchanges within the country. The on-site inspections revealed that more strict regulations were in order in terms of approving new submissions and applications any cryptocurrency exchange looking for a legal license.
After the inspection and the results of each one, new changes have been made in terms of certification and licensing. From now on, any cryptocurrency exchange will go through an on-site examination by government officials analyzing each applying company.
According to the paper, inspectors will enrich the confirmation of evidence in light of the company’s plan of action and the efficiency of inner management systems as well as the governance system that prioritizes user security and conducting on-site verification. As for Coincheck, a distinguished cryptocurrency exchange that fell victim to a vulnerability on its system which resulted in hundreds of millions in dollars being lost, the financial agency will inspect the company individually.
After the successful hack on Coincheck, the exchange was acquired by Monex and several changes were made as a means of fully complying with any regulations that the government has made. Apart from the recommended changes in policy, the FSA has also mentioned that self-regulating companies may also see inspections by the watchdog themselves.
This comes as no surprise due to the first rules and laws in regards to cryptocurrencies emerging from the government following the Mt. Gox hack in 2014. In light of the hacking on Coincheck, the FSA then decided to review and re-regulate the cryptocurrency exchange ecosystem due to the previous hacks clearly displaying ineffective previous regulations.
Despite no guarantee that any of these inspections and changes will provide further security or change malicious acts in general, it may prove to be a useful addition to regulatory systems within Japan and elsewhere.