Japanese crypto regulators sent crypto prices spiraling lower earlier this month when they announced a heavy-handed crackdown on seven local cryptocurrency exchanges (and ordered month-long suspensions for two more).
As CoinTelegraph reports, the Japanese Financial Services Agency (FSA) has sent “punishment notices” to seven crypto exchanges and temporarily halted the activities of two more after a round of inspections prompted by January’s Coincheck hack, CNBC reports Thursday, March 8.
The FSA issued business improvement orders for a lack of “the proper and required internal control systems” to seven exchanges, including Coincheck, which was specifically cited as lacking a system for preventing money laundering and the financing of terrorism.
The crackdown followed a historic theft of more than $500 million of NEM tokens from the Japanese exchange CoinCheck, which had been attributed to the fact that the exchange stored its customers’ funds in a low-security wallet. Regulators also discovered that an employee at unlicensed exchange Bit Station had improperly accessed customers’ coins.
And yesterday, the FSA warned Binance, a popular Hong Kong based exchange that was launched last year after issuing an initial coin offering, that it must either obtain a license or cease operating in Japan.
Meanwhile, in what appears to be a bid to avoid scrutiny from the FSA, Japan’s 16 licensed cryptocurrency exchanges are planning to launch a self-regulatory body similar to FINRA.
Perhaps sensing an opening, Yahoo Japan is planning to launch a regulated bitcoin exchange, according to a Nikkei report published Friday. Instead of building the exchange from scratch, Yahoo Japan plans to acquire a 40% stake in BitARG Exchange Tokyo, one of the 16 licensed exchanges, and use its technology to build a new exchange, to be launched in April 2019, or later.
The shares will be purchased for 2 billion yen ($19 million) via BitARG’s subsidiary YJFX, a forex trading platform.
The news had no discernible impact on crypto prices, which continued to drift lower Friday morning.
Earlier this week, Japanese officials attending the G-20 summit in Buenos Aires defended cryptocurrencies, arguing they were not a threat to broader financial stability…
Unlike so many of his peers, BOJ Governor Haruhiko Kuroda has refused to slam cryptocurrencies – instead choosing to highlight the crypto “wealth effect” which he said could have a positive impact on GDP.
Japan became the first G-10 country to adopt a comprehensive regulatory framework for cryptocurrencies last year when legislation recognizing bitcoin as money – and clearing the way for financial institutions to deal in crypto – was signed into law.