Reportedly, for the very first time, the Japanese financial regulator is set to reject a crypto exchange application. The exchange had already suspended twice while it had applied for approval because of its improper crypto related trade activities.
Rejects for the first time
According to the news portal, Nekkei said that Japanese Financial Service Agency (FSA) is planning to reject a crypto exchange application operating in country.
The news portal added;
“The decision follows the ministry’s conclusion that Yokohama-based FSHO lacks the necessary systems to operate its business. By barring an exchange operator that it has found to be substandard. The agency aims to demonstrate its determination to re-establish a sound currency trading environment in Japan”.
What is FSHO?
FSHO is a ‘quasi-operator’ or ‘deemed dealer’ of Japan cryptocurrencies which means that organization can provide crypto service until it get approved by FSA. Overall, there are 16 deemed cryptocurrency exchanges and in which around 8 of them will withdraw their applications, FSA said.
Simultaneously, Japan has already own 16 licensed crypto exchange and many crypto institutions are trying to enter into Japanese market. Recently, Coinbase, crypto exchange service firms which already operates over 32 countries. It has now revealed its plans to enter into Japan market and set up its office.
The new move was announced Monday, June 4th, 2018 by the Vice President and GM of Coinbase, Dan Romero.
“We plan to take a deliberate approach to our rollout in Japan, which means working hand-in-hand with the Japanese FSA [Financial Services Agency] to ensure compliance with local laws at every stage. As a regulated, compliant crypto company in the U.S.”
Two Punishments Orders So Far!!!
Till date, the only cryptocurrency exchange in Japan to receive two punishment orders from Financial Service Agency was FSHO. The first was on March 8th and was on April 6th. The FSA, had suspended all of FSHO’s businesses related to cryptocurrencies from Mar 8th to April 7th and the improvement order was issued. The firm was asked to correct four areas like, “Build a position to securely manage user information”. The FSHO was supposed to report bank to the FSA on Mar 22nd.
The Second Suspension Order
The second suspension order was passed in the month of April, the FSA agency had stopped all crypto related operations from April 8th to June 7th. Similar to the first order, the second order contains five improvement in areas in which the new improvement was, “Establishment of an effective management system including money laundering and terrorist financing”. Therefore, the company was expecting to report the changes to the agency by May 7th.
Finally the Financial Service Agency found that, the FSHO crypto exchange app which has not verified effectively in which the crime was suspected.
Nikkei reported that,
“The suspension period is due to end Thursday, after which the agency will bar the exchange from operating and deny its registration”.
Simultaneously, many exchanges are working hard towards self regulations with intentions. Firstly, they don’t want FSA agency to micromanage their companies including each every activities.