Japanese Regulator FSA suspends operations of two crypto exchanges. The exchanges that have received the orders are the FSHO and Bit Station. The suspensions are effective for a period of the whole month, starting from today.
8 March, AtoZForex – Financial regulatory body in Japan have ordered a month-long suspension for two of the local cryptocurrency exchanges.
Japanese Regulator FSA Suspends Operations of Two Crypto Exchanges
This Thursday, the Financial Services Agency (FSA) has stated that it has issued suspension order to two exchanges in Japan. The exchanges that have received the orders are the FSHO and Bit Station. The suspensions are effective for a period of the whole month, starting from today.
The Japanese regulator has also ordered other trading platforms, including Coincheck, to improve their system security measures. The exchanges have to submit a written improvement plan by the 22 of March.
Earlier this year, the cryptocurrency exchange CoinCheck has experienced a cryptocurrency theft. The $530M Coincheck cryptocurrency theft was one of the biggest cybersecurity hacks in history. The theft also points out the vulnerabilities in trading that global authorities are trying to get hold of. The hack also highlights the wider risks for Japan as it looks into leveraging the fintech industry to boost the economic growth.
The NEM coins’ theft has been carried out because of the usage of “hot wallet” instead of “cold wallet”. The Coincheck also has pointed out that the “hot wallet” does not use extra layers of security or a multi-signature system.
FSA Cryptocurrency Exchange Study Group
After its on-site probe on Coincheck, the Japanese FSA has expanded its investigations to other local cryptocurrency trading platforms. These platforms are yet to be approved by the regulator. As of the moment, the authorities are inspecting the exchanges for inadequate security measures.
In addition, the FSA has also set up a cryptocurrency exchange industry study group. The group aims to analyze the institutional issues in relation to the cryptocurrency. According to the FSA, members of the study group will come from the academic institutions, government agencies, and the cryptocurrency exchanges themselves. The Japanese regulator will act as the secretariat.
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