The financial regulators of Japan continue their cryptocurrency market investigation. They have recently paused the work of two more local exchanges and issued warnings to more than four exchanges a month ago.
Those exchanges which became the subject of the March complaints of the Financial Services Agency have failed to provide security measures enough to satisfy the law enforcement. In the case with Eternal Link and FSHO, the KYC policy non-compliance was the crucial factor.
The primary reason of the increased regulators’ activity is the disaster which has happened with Coincheck. Unknown hackers (some suspect North Korea) have stolen over $500 million funds in NEM. This has been the largest hack of a crypto exchange in Japan since Mt Gox. Clearly not willing to see another criminal success and traders’ outrage, the authorities have decided to review the whole market which already resulted in the temporary closure of Mr. Exchange and Tokyo GateWay.
Japan is now even forming a separate agency to combat cryptocurrency thieves. Its members will come from other branches of the law enforcement. The need to form such a structure indicates that the government expects further hack attacks on crypto exchanges.
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