Financial regulator of Japan (FSA) has revised rules and procedures for registration of cryptocurrency exchanges after the break Coincheck and a number of checks which revealed gaps in security systems for multiple sites. Representatives of the regulator stated that their goal is to rebuild the industry of cryptocurrency.
According to the newspaper Sankei Shimbun, the FSA «will enhance the validation process before registration» for companies that have applied but not yet received a license. These companies, known as «quasioperational» cryptocurrency, are allowed to work while their application for registration is pending. The test procedure is added «inspection of the regulator in the offices of the companies». The article says:
«As a result of the inspection companies that will not improve his work, will not be able to continue operations.»
This process will help to avoid a repetition of the situation with Coincheck recently hacked exchange has applied for a license in September of last year, but she was allowed to continue working as quasioperational.
The FSA took the decision to tighten rules after checking all of quasioperational and identifying gaps in the security system of many exchanges. After that, five companies withdrew their application for registration, and several exchanges have been ordered to suspend operations. According to Jiji Press, another also exchange Campfire «has shown a willingness to withdraw an application for registration».
Some exchanges have received licenses from the Agency — including Quoine, the Tech Bureau and GMO Coin — were also tested. Tech Bureau and GMO Coin has already received from the Agency’s recommendations for changes in their work.
«Basically, we study the system of protection of users and the auditing function, which is not only about reporting. We also check whether the company’s corporate governance through proper separation of administrative and Executive power», — specify in the FSA.
It was recently reported that more than 100 companies have applied to the FSA for the licensing of cryptocurrency exchanges.