This step by JVCEA is due to a September hack on an Osaka based trading exchange run by Tech Bureau Corp (TBC). To mitigate such risks, the JVCEA is planning to set a ceiling on the number of digital currencies online under the exchange. And this ceiling is to be set at 10-20 percent of the customer deposit.
Japan to Tighten Crypto Exchange Regulations
The self-imposing rules set in July is going to revise and implement as soon as the Financial Services Agency (FSA) will certify it. These improvising rules will aim to provide enhancing protection to investor funds in the wake of recent attacks. The company officials didn’t notice the hack, until three days later.
Japan’s FSA will be performing a physical platform inspection and also asks TBC, owners of Zaif exchange to send incident reports. The recent September heist cost Zaif exchange (by TBC) to lose a total of ¥7 billion in cryptos, which was present online. Out of which a total of ¥4.5 billion in customers’ cryptos.
Another incident prior to the hack of TBC was the heist of Coincheck exchange in January. A total of ¥58 billion in NEM were stolen. These assets seem to manage online. JVCEA says to have formation after this heist. This step was to rebuild the people’s trust in Japan’s cryptocurrency industry.
Japan’s one among the countries who are taking initiative and welcoming blockchain innovation and cryptocurrencies. But incidents like these will force the government’s hand to tighten crypto exchange regulations.
Is this a mistake from the exchange’s end? I always thought to keep cryptos in exchanges were a dumb idea, and if these hacks prove me and most others out there right. So, people please place your cryptos in a cold storage wallet, offline, safe from hackers.
Image Credit- Econotimes, Infocoin