- FSA is likely to issue the license by the end of the year
- The crypto exchange has revised its KYC and AML measures
- FSA is satisfied the acquisition by Monex Group has brought a positive contribution
Japan will license the hacked cryptocurrency exchange Coinchek early next year. The exchange lost a record $532 worth of NEM earlier this year.
FSA Approves Cryptocurrency Exchange
The announcement is contained in the English–Language Asia Focused Nikkei Asian Review of December 19, 2018. As per the news outlet, the announcement from the country’s financial regulator, the Financial Services Agency, the official report will be released towards the end of the year. The Nikkei report however emphasized, “it is not [the exchange’s] official announcement and we haven’t confirmed the fact yet.”
The FSA has heightened its scrutiny levels for local cryptocurrency exchanges following a number of hacking incidents where investors have lost lots of money. The mother of all hacking incident happened in January when coincheck cryptocurrency exchange lost a record-breaking $532 million worth of NEM Tokens stolen from coincheck’s wallet.
Even though having a license has been a legal requirement for any cryptocurrency exchange operating within Japanese territory following the amendment of the country’s Payment Services Act in 2017, the Financial Services Agency has continued to intensify the application requirements throughout this year. As a result, there are over 160 applicants who have been waiting for a decision on their applications as of October and, according to the Nikkei news outlet, there should be well over 200 companies on the waiting list as of now.
After the Coincheck hacking incident in January 2018, the gave the Services Agency cryptocurrency exchange two business improvement orders, especially focusing on enhancing the company’s Know Your Customer (KYC) and Anti-Money Laundering (AML) measures. Following the stringent requirements from the financial watchdog, the exchange decided to completely overhaul its management and shareholder composition and recently became a wholly owned subsidiary of the Monex Group.
Under the new management by Monex, Nikkei reports that the FSA must have judged and concluded that the protection measures out in place and other critical systems are now good enough to warrant the issuance of a new license. Additionally, Coincheck is reported to have revised the list of cryptocurrencies it is going to manage besides completely reimbursing those customers who got affected during the January incident.
Coincheck resumed trading in NEM in Mid-November in addition to starting support for Lisk (LSK) and Ethereum (ETH) besides joining the Japan Network Security Association, something that may also have contributed in cleaning up the company’s image.