Investigation into 15 unlicensed Japanese crypto exchanges
15 Japanese crypto exchanges will be scrutinized by the government. These crypto exchanges had already applied for licenses but it was still pending for approval. The Japanese government announced this investigation just because of a major hack occurred in the Coincheck exchanges, in which NEM coins worth $533 million was vanished.
Investigation will take place to review their security measures for their site to protect user’s data and funds. All the crypto exchanges in Japan have already got a notification from the Financial Services Agency to submit the report on their security measures that they use to protect users’ data and fund after Coincheck lost millions of tokens from their wallet. Now the Japanese government decided to implement on-site investigation into all the licensed and unlicensed crypto exchanges.
License was mandatory after the Japanese government introduced cryptocurrency as a legal payment method in April 2017. Coincheck already made an application for the license but it was still in queue for approval from the FSA. But the FSA allowed Coincheck to run their business operation until the approval process was finished.
On 29th January, Coincheck was suggested to evaluate their security systems that might be broken by hackers and also to send a report on their upgraded management to the government authority. The FSA said
"Inappropriate management of system risks had become the norm at Coincheck."
First time the Japanese authority took legal action against a foreign crypto provider for recommending unlicensed financial token after bitcoin was authorized as a legal payment method.
Source:
https://www.coindesk.com/japanese-government-orders-inspections-at-15-unlicensed-crypto-exchanges/
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