Japanese Cryptocurrency Exchanges Face Stricter Improvement Order

Major Japanese Crypto Exchanges Face Action Over Money-Laundering Fears

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  • Japan sends improvement orders to major Japanese cryptocurrency exchanges.
  • Though these exchanges had complied with the AML rule, they still allow suspicious trades.

Japan: Last month, the Japanese Financial Service Agency (FSA) set out new rules for all 16 Japanese cryptocurrency exchanges, with the claim that the new rules were set to protect investors. Where some exchange stopped operation and left the country, only 8 exchanges applied for the license.

Tuesday 19th June, it was reported by Nikkei that the Japanese FSA is presently making plans to enforce improvements on the 8 licensed crypto exchanges over alleged issues relating to anti-money laundering (AML) measures.

The Japanese FSA has plans to ensure that all the Japanese cryptocurrency exchanges fully comply with the standing anti-money laundering (AML) measures as they experience larger customer base and hold more customers’ funds. According to the report, the FSA has listed out about 5 exchanges which the body would send “business improvement orders” to this week. Th exchanges include Bitbank, Quoine, and bitFlyer.

It was further reported that the FSA discovered, based on earlier investigations, that some licensed Japanese cryptocurrency exchanges still have not put in place adequate measures for detecting shady transactions. More so, FSA mentioned that these exchanges have not employed sufficient staff to handle their increasing volume of transactions.

Last March, FSA had issued a similar “business improvement orders” two Japanese cryptocurrency exchanges following its examination of cryptocurrency trading platforms after the Coincheck $530 million worth of NEM heist last January. The exchanges are Tech Bureau and GMO Coin.

FSA rejected FSHO crypto exchange’ license application earlier this month. The agency had earlier issued 2 suspension orders to the exchange over the alleged poor implementation of security and AML improvements.

FSA made this recent move just a few days after the Japanese Cryptocurrency Exchange Association (JCEA) – a self-regulatory group of crypto exchanges planned to toughen their AML measures by preventing member exchanges from listing anonymous digital currencies like Dash and Monero.

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