Sayonara: Two More Japanese Crypto Exchanges Closing Amid FSA Crackdown
Substandard cryptocurrency exchanges in Japan continue to close, unable to comply with regulatory demands, as Thursday (JST) marked the two latest casualties, Mr. Exchange and Tokyo GateWay, per the Nikkei Asian Review. The two Japanese trading platform operators serve as the fourth and fifth to have departed their market since the Coincheck cyberattack debacle of late January – and “more are expected to follow,” as their regulatory watchdog cracks down in an effort to repair the tarnished reputation of Japan’s cryptocurrency exchange space.
For Mr. Exchange and Tokyo GateWay customers, the Nikkei Asian Review stated that they will be given ample time to withdraw funds before both operators deactivate their trading platforms.
There are yet to be any official announcements from Mr. Exchange or Tokyo GateWay as of press time, but the reports from the reputable Japanese news agency are almost certainly true (and not all that surprising).
This is because Japan’s Financial Service Agency (FSA) has been vocal in conveying their intentions of overseeing their domestic cryptocurrency exchange market in a more stringent manner. High time, it would seem, given Japan now holds the undesirable title of housing not the largest (see: the 2014 Mt. Gox incident), but the two largest cryptocurrency exchange heists recorded to date.
Indeed, earlier this month, the FSA suspended the operation of two crypto exchanges: FSHO and Bit Station. The latter has since withdrawn its application with the regulatory institution, per the Nikkei Asian Review, along with two more in Raimu and bitExpress.
In transitioning to tighter regulation, the FSA has issued numerous orders to market participants they considered substandard (mostly re: cybersecurity); granting them opportunity to adhere to requests.
The reason “more are expected to follow,” the Japanese news service explains, is because many cryptocurrency exchange operators have been unable to meet the FSA’s demands, and so in ending a grace period where the regulator strongly advised these inferior exchanges to cease operating, they will soon begin “ordering them to do so.”
The tighter regulatory oversight by the FSA appears appropriate, particularly because with Japan attracting such high volumes of trader activity, they remain a perpetual target of malicious cyber criminals.
However, both Bitcoin (BTC) and altcoin investors alike appear in for more days in the red, at least in the short term. Expect the imminent closures of other Japanese cryptocurrency exchanges to attract far-reaching mainstream media coverage, and therefore, a spate of sell side pressure from ‘weak hands’ who fail to understand that the security issue troubling crypto exchanges has nothing to do with the distributed ledger design underpinning blockchain technology used by Bitcoin.
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