Six Japanese cryptocurrency exchanges that are legally operating across the country responded to the Financial Services Agency’s improvement requests. Two of the board members have resigned.
The Financial Services Agency (FSA), Japan’s leading regulatory company, issued on 22 June improvement orders to six crypto trading platforms. As previously reported by Coindoo, Japan is the home of 16 regulated cryptocurrency exchanges. Those that have been notified by the FSA are Bitflyer, BitPoint Japan, Btcbox, Bitbank, Quoine, and Tech Bureau. Note that only the last mentioned received one more notice in addition to others.
Two directors have resigned
The 16 cryptocurrency exchanges formed in March 2018 the Japan Virtual Currency Exchange Association (JVCEA) as a measure of protection against the cybercriminal attacks such as the Coincheck one. The objective of the association is to restore the citizens’ trust in this industry.
The association has four directors: “Bitflyer’s Yuzo Kano, Bitbank’s Hiroyuki Noriyuki, SBI Virtual Currencies, Yoshitaka Kitao, and GMO Coin’s Tomitaka Ishimura.” On 25th June, the JVCEA announced that two of them have resigned, stating:
“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.”
Regardless of this announcement, the association has announced that it will not give up on its principles and will continue to fight and protect users’ moves and promote the benefits of cryptocurrency exchanges.
How did crypto exchanges react to the improvement orders?
On the same day it received the improvement order, Bitflyer, Japan’s largest cryptocurrency exchange by 24-hour trading volume, made public its future plans. The company has suspended the registration of new users for a specified period and is about to focus on checking existing accounts.
Bitbank also took into consideration the notification received from the FSA and revealed it will review “the internal control system and management system” so that it will “ensure proper and reliable operation of the business towards customers’ recovery of trust”. The platform confirmed the customer assets will not be affected.
“There will be no impact on various services and customer assets provided by our company due to the business improvement order this time. You can use the service as usual for all transactions/functions including deposits and withdrawals of Japanese yen,” the company elaborated.
Bitpoint Japan stated that: “We sincerely apologize for any inconvenience caused to you and other concerned customers,” adding that it will improve the management control system.
On the other hand, Mike Kayamori, CEO of Quoine, explained the order is about “governance, compliance, back-office, KYC and AML,” rather than a security measure, adding that the company “will need to pull out some necessary resources, especially from the back end developers who will need to provide the necessary data to comply and work with the FSA.”
“We believe this will be about a month or two process and business will be as usual,” said Kayamori.
The cryptocurrency exchange Zaif, administered by the Tech Bureau, revealed that it will improve two additional aspects besides the notification received in March 2018. The new targets are “Establishment of an effective risk management system” and “Establishment of a system to respond appropriately to customers.”
Btcbox has agreed with the FSA’ notification, stating that: “We take the situation sincerely, we deeply reflect on it”, mentioning that it will carry out the measures required by the agency.
“We sincerely accept that we received the improvement order again. To make it possible for customers to use it with confidence, we will endeavor to further improve and strengthen the organization and work together throughout the company so that we can establish an appropriate management system,” explained the company.