Cryptocurrency Crackdown Expanded in Japan after Coincheck hack

Bitcoin Suffered Losses After The Regulators Announcement

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The financial regulation in Japan ordered for further improvements at embattled Coincheck Inc which is a cryptocurrency exchange organization. Additionally, six others were penalized including one of them publicly operated listed GMO Internet Inc.

Therefore, the financial services agency then informed Coincheck that they should revise its structure, initiate the improvement of anti-money laundering procedures and make sure that they submit a report by 22 March. At the time, two exchanges Bit Station and FSHO were given the notice to halt their operations for a period of one month. This is according to the agencies briefing in Tokyo on Thursday. Additionally, the other exchanges which face a penalty are the GMO Internet’s GMO Coin, Mr. Exchange, Bicrements and Tech Bureau Corp.’s Zaif.

The FSA has however allowed 16 operators such as Coincheck to continue operation as they await their application decision under a revised licensing system. Applications have been approved for 16 organizations such as Zaif and BitFlyer Inc.

After this announcement, Bitcoin extended losses and the FSA seeks to shore up security after the $500 million hack on Coincheck exposed flaws to the regulations set.

GMO Faults

FSA declared they fund problems during the GMO inspection on 13 Feb. They said that the organization failed to investigate the cause of the faults. It also failed in taking necessary steps to prevent the faults from happening again. Therefore, the exchange is obligated to improve the internal systems by 22nd March. On the other hand, GMO shares dropped by 3.6%.

“We will make efforts with all of our power to restore trust as early as possible,” stated Junko Suzuki who is GMO’s spokeswoman.

Bit station was penalized on Thursday and is seeking application withdrawal. Additionally, other two including BitExpress no longer want the agencies approval to operate. Therefore the FSA must revise the structure of their management with leadership changes. Therefore they should make various adjustments before they can restart and open new accounts.

Coincheck Reimbursement

In the most likely case, FSA can’t oppose Coincheck plans to reimburse users of the hack. This is because, on Jan 28, Coincheck announced that they would use the organization’s funds to repay around $400 million to the customers who lost their money.

Bitcoin went below $9,700 as on Thursday.

 

 

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