Six of Japan’s fully-licensed cryptocurrency exchanges have responded to business improvement orders issued by the Financial Services Agency (FSA). Additionally, two executives resigned from their posts as vice presidents in the recently formed crypto exchange association.
Japan’s FSA issued the business improvement orders to six crypto exchanges last June 22nd. The exchanges that received the orders were Bitflyer, Bitpoint Japan, Btcbox, Bitbank, Quoine, and Tech Bureau. Of the six, only Tech Bureau has received two business improvement orders.
JVCEA Loses Two VP’s
Japan’s crypto associations founded the Japan Virtual Currency Exchange Association (JVCEA) in March. The association consists of the 16 government-approved crypto exchanges. The JVCEA formed in response to the Coincheck hack aiming to restore consumer trust in the crypto industry.
On June 25, the association announced that two of its officials have resigned, saying that:
“In response to the fact that vice chairmen of the association, Yuzo Kano and Hiroyuki Noriyuki, representative directors of Bitflyer Co. Ltd. and Bitbank Corporation, received business improvement orders concerning their virtual currency exchange businesses, we inform you that we have received resignation requests from both of the vice presidents on this date and have accepted them.”
The JVCEA says that they will continue to protect their user’s interests and promote the development of the crypto industry, which includes the establishment of voluntary regulation rules. Domestic media outfit Nikkei reported the association was going to release self-regulatory rules this week. The JVCEA has not yet confirmed any details about this.
Crypto Exchanges Respond
Japan’s largest crypto exchange by trading volume, BitFlyer has stopped new user registrations and has started to strengthen their account verification process for existing users.
Bitbank is reviewing their “ internal control system and management system” to help “ensure proper and reliable operation of the business towards customers’ recovery of trust.” The exchange notes this will not impact customer assets. Bitbank ended by saying they will establish a sophisticated management system in tandem with government authorities.
Bitpoint Japan apologized for the inconvenience caused to their customers and said they are working to enhance their management control system.
Btcbox apologized as well and noted they are building a management system as directed by the FSA.
Quoine’s CEO, Mike Kayamori, explains how the exchange will comply with the FSA. He says the order is all about “governance, compliance, back-office, KYC and AML,” and not about security or theft. He notes the company will need to pull out some resources from their back-end developers currently working on their Liquid platform. He clarifies that the process will take about a month or two and business will be as usual.
Zaif, owned and operated by Tech Bureau, says aside from complying with the previous business improvement order, they will also establish a risk management system and establish a system to help respond appropriately to customers.