Japan’s Financial Regulator Tightens Screening Process For Crypto Exchange ApplicantsSep 03, 2018 at 19:16
Cryptocurrency exchanges will be in for a more challenge in setting up office as Japan’s financial regulatory office resumes and tightens its registration screening process months after the massive hacking incident earlier this year.
The Financial Services Agency’s stricter process will see to it that aspiring crypto exchanges conduct risk management measures, the Japan Times reported.
This tighter screening process is in line with the revised Payment Services Act that took effect in April 2017 to ensure cryptocurrency users’ protection.
In screening the applicants, the financial regulator has increased the number of questions by four-fold to 400, the report said.
Questions before included only financial status and measures to ensure system safety.
The FSA now also requires crypto exchanges to submit minutes of board meetings to check whether the companies regularly apply measures to keep its financial health and security systems in check.
This will allow the state watchdog to scrutinize whether executives of crypto exchanges are much involved in the company’s decision-making.
Moreover, it will have an unobstructed view on the composition of the company’s shareholders, the report said.
The FSA suspended its screening process after the $530-million hacking incident on Coincheck Inc., one of Japan’s largest cryptocurrency exchanges, last January.
The cyber theft is considered as one of the biggest cyber heists on record.
According to analysts, FSA’s new screening process may led to dwindling interest from cryptocurrency exchange operators. Previously, over 100 companies have expressed interest to register.