KuCoin Closing Its Serviced in Japan
KuCoin, the Hong Kong-based cryptocurrency exchange has announced that they will halt their trading services in Japan. KuCoin is the second exchange that will close its doors for Japanese investors, following Huobi’s closing.
Huobi made their announcement to their Japanese traders via an email, which said that they’ll cease trading starting from July 2nd. While Huobi did not give any reason, KuCoin cited that it’ll stop services “out of respect to Japanese legislation requirements”.
KuCoin’s notice states that they’ll reject all KYC verification requests from Japan. The statement also mentioned that they will not be offering support for the Japanese language as well. In spite of its reputation as a pro-crypto country, Japan has been implementing stricter regulations for all the digital currency exchanges that operate within its borders. These regulations have been introduced in an effort to avert crypto attacks.
At the beginning of this year, Coincheck, a Japan-based cryptocurrency exchange lost $400+ worth of cryptocurrency in a hack. This attack determined the Financial Services Agency (FSA) to attempt and enforce additional security measures, particularly in the crypto exchange industry.
According to the law introduced in 2016 regarding money transaction, exchanges should be registered with the Financial Services Agency (FSA). Popular crypto exchange Binance had received a warning from the organization earlier this year. It notified the exchange that as a foreign company, they were offering trading services to Japanese residents while they weren’t licensed.
FSA’s guidelines stipulate that the exchanges shouldn’t hold any kind of digital currency in their online wallets. Furthermore, the exchanges should have implemented a two-factor authentication process for all transactions, which has the purpose of ensuring that unauthorized individuals will not be able to transfer any coins.
Also, to prevent money laundering and such illegal activities, all exchanges must use a thorough KYC verification. Traders that want to transfer large amounts of cryptocurrencies have to go through detailed identification protocols.
All exchanges must apply the best practices for asset management and they are forbidden from listing certain types of cryptocurrencies. The rule refers to privacy coins or coins that claim to offer complete anonymity. These coins will no longer be listed on FSA-registered exchanges, as they believe it might give way to money laundering.