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7 Japanese exchanges penalised, 2 ordered to suspend trading

Posted: 9 March 2018 12:06 pm
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Bit Station and FSHO are ordered to suspend trading for a month, and Coincheck plans its reimbursement.

15 Japanese cryptocurrency exchanges were ordered to undergo inspections following the theft of over $500 million worth of NEM from the CoinCheck exchange. It was later found that the coins were stored in a low security "hot" wallet, making it a relatively easy target for the amount of money involved, and that many exchanges might be similarly operating improperly.

The Financial Services Agency (FSA) investigated fifteen exchanges, issued seven with penalty notices and suspended two for a month, CNBC reports.

The two suspended exchanges were Bit Station and FSHO. An employee at Bit Station was found to have been using customers' bitcoin for personal purposes and Bit Station has since dropped its application to become an authorised exchange.

The seven penalised exchanges, which included CoinCheck, were found to be operating without the proper internal control systems and lacking a system for preventing money laundering and the financing of terrorism.

Despite the penalty notice, CoinCheck has been found to have enough funds to compensate its affected customers. It expects to be paying out around US$430 million.

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, SALT, BTC, XRB

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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