The $500+ million Coincheck hack earlier this year has been a major driver of change across the Japanese regulatory landscape, and now the country’s Financial Services Agency has taken action against two more cryptocurrency exchanges.
According to Nikkei Asian Review, the FSA has ordered Eternal Link and FSHO to suspend operations for a period of two months, starting from April 6 and April 8, 2018, respectively.
The action comes amidst the FSA’s efforts to ensure that the 15 unregistered crypto exchanges operating in the country take all appropriate measures to ensure the security of customer funds and data. The agency also issued an improvement order to Last Roots crypto exchange, requiring it to take necessary steps to this effect.
Last month also two exchanges, Mr. Exchange and Tokyo GateWay, decided to shut down in the face of the FSA’s increased scrutiny.
Interestingly, Coincheck, which is at the heart of this initiative, was acquired today by one of the top Japanese online brokerages – Monex Group.
All of the shares in Coincheck were reportedly bought for a sum of $33.5 million, and the takeover agreement requires the existing management to step down and be replaced by Monex Group’s appointees, in order to regain investor trust.
Coincheck’s new owners intend to resurrect the exchange in line with the FSA’s rules and have it registered in a two-month time period to get it back on track.
While the Mt. Gox event was a major set back for the crypto space, the Coincheck hack, though significant, did not dent the market as much as the former. That being said, every time an exchange falls to security lapses, it erodes investor confidence and affects market growth.
According to Coincheck, some of the blame can be attributed to the lack of qualified engineers in Japan, which resulted in a shortage of staff required for risk management and internal security checks.
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