According to Cointelegraph, the FSA in Japan has updated their current regulatory guidelines for exchanges.
This is not surprising considering what happened with the Japanese based Coincheck, back in January.
If you do not recall, the Coincheck exchange was hacked to the tune of $532 million, which was the largest cryptocurrency exchange hack of all time.
It was a stern reminder that the current crypto wild west environment had to change, big time.
What are the recent updates/requirements from the FSA in Japan?
Besides just preventing a repeat of what happened with Coincheck, the FSA is requiring an updating of investor protection protocols just about at every corner.
Starting with the exchange's internal management systems.
Some of the main requirements are as follows:
- Exchanges will be required to monitor customer accounts multiple times per day for suspicious fluctuations.
- Exchanges will be required to hold client's assets separately from those of the exchange.
- Exchanges will be required to store crypto assets in offline systems only.
These changes are on top of the increasing know your customer (KYC) and anti money laundering (AML) measures already being taken.
ID verification and multi password entries will also be required for large transfers.
Here's the big one in all of this...
Apart from all of that there was one big thing that is likely to effect crypto markets, especially for a handful of coins specifically.
The local exchanges in Japan will no longer be able to trade anonymous coins. Coins such as Dash and Monero are effectively being banned from government registered exchanges in Japan.
This likely does not affect peer-to-peer exchanges, but it appears that the big major government registered exchanges will no longer be able to make markets in the anonymous coins.
Special inspectors will be sent to exchanges from time to time to make sure they are compliant with these new guidelines mentioned above.
All of this amounts to increased costs for exchanges.
Krakan has already announced that they will no longer be doing business in Japan due to rising costs of compliance.
Though costly, these new measures will provide a safer environment for investors and as measures like these get adopted globally, the odds of institutional type investors getting involved in the space increases substantially.
Which means overall, these are likely good things for the space.
Stay informed my friends.
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