Japan’s Financial Services Agency (FSA) is among the most vigilant financial watchdog bodies in the nation. Following uncertainties in the markets and the number of hacks and scams on the rise, the FSA had set out a set of strict guidelines that need to be followed in order for a cryptocurrency exchange to be officially approved. The last such approval had come over a year ago. Yesterday, however, the FSA approved Coincheck cryptocurrency exchange: making it just the 17th fully-registered exchange in the country.
Japan’s Payment Services Act requires all cryptocurrency exchanges to be registered with the Financial Services Agency. This ensures that exchanges operating in Japan follow the ideal standards of security that the government deems appropriate. The parent company of Coincheck, Monex Group, released a press statement which said:
Coincheck Inc … announced today that it has registered with the Kanto Financial Bureau as a cryptocurrency exchange agency in accordance with the Payment Service Act, effective January 11, 2019.
The Coincheck cryptocurrency exchange deals in the following nine cryptocurrencies: BTC, ETH, ETC, LSK, FCT, XRP, XEM, LTC, and BCH. The Coincheck cryptocurrency exchange has been a rather controversial name in the past. In early 2018, the exchange was hacked and cryptocurrencies worth $530 Million were stolen: the biggest hack in the history of cryptocurrencies. However, following the hack, the exchange was taken over by the Monex Group, which has since worked towards rebuilding the platform’s security and has brought forward several improvements.
Coincheck had originally applied for registration with the FSA back in September of 2017. However, over the months the exchange continued to be monitored and evaluated by the FSA - and even termed it a ‘deemed dealer’. However, the status of being an officially registered cryptocurrency exchange has finally been granted to the Coincheck exchange - almost a year after its controversial hack.
In their press statement, Coincheck has stated that they have improved upon six areas:
Improved governance fundamentally
Revisited the business strategy and ensured customer protection
Strengthened governance control by the board
Clarified risks on cryptocurrencies being offered by the company
Implemented measures on anti-money laundering (AML) and countering the finance of terrorism (CFT)
Revised organizational structure to ensure validity
Over the months, the exchange had issued several clarifications to its users. This included Monex group announcing in December 2018 that Coincheck does not offer cryptocurrency mining-related services - including cryptocurrency mining itself. This announcement was made by the company in light of the likes of Japanese groups GMO and DMM quitting the cryptocurrency mining industry. Another statement stated that Coincheck does not conduct cryptocurrency transactions on its own account. The statement reads:
“Coincheck Inc. does conduct cover transactions with domestic and overseas cryptocurrency exchanges speedily for the positions that resulted from the selling and buying transactions with customers.”
While Coincheck has become only the 17th name in Japan to be officially registered as a cryptocurrency exchange, the FSA had stated in the past that there is an active interest in cryptocurrency exchanges to enter the Japanese markets - adding that by the end of 2018, over 190 names had expressed their desire for registering with the FSA.
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