Sun. Jul 12th, 2020

The Japan Financial Services Agency show that the internal management of the virtual currency exchange is insufficient

2 min read

The Japan Financial Services Agency recently announced the inspection reports of all virtual currency exchanges in the country, as well as some of the regulatory measures taken by the agency in recent years.

The report shows that the total assets of most virtual currency exchanges have increased more than five times in the past few years, but at the same time, there is the insufficient internal management of these exchanges.

For example, in Japan’s exchanges, there have been many cases of hacking and loss of virtual currency, and investors will ultimately risk these attacks.

Image: By Open Source ( [MIT], via Wikimedia Commons

Therefore, based on the purpose of protecting investors, the Japan Financial Services Agency has strengthened its regulatory measures since the end of last year and strictly required exchanges to improve its internal management capabilities.

Since last year, a variety of fish-mixed teams have begun to issue tokens based on Ethereum, but most tokens do not have any value and are therefore fraudulent.

After these tokens reach the highest price through speculation, the founding team will choose to sell cash, and the investors will naturally be the investors who originally purchased these tokens.

Worse than the above, some of the token issuing teams even ran the road immediately after the fundraising was completed, and then sold the Ethereum or Bitcoin for cash.

There are still many well-known or unknown teams in the issue of tokens for fundraising, which is also the focus of the Japanese Finance Department’s supervision of virtual currency.

Now both South Korea and Japan require exchanges to perform real-name certification for users. The fundamental purpose is to crack down on illegal crimes such as cross-border money laundering.

However, the Japanese Financial Services Agency found that many exchanges still do not strictly follow the agency’s regulatory requirements to conduct real-name certification for investors.

For such behavior, the Japan Financial Services Agency will continue to conduct strict inspections in the follow-up and may be disqualified if it finds that it is not operating by relevant regulatory measures.

The security risk is the biggest problem facing all virtual currency exchanges. At present, there have been many cases of stolen money caused by the theft of virtual currency exchanges.

The Japan Financial Services Agency found that there is the insufficient internal management of many virtual currency exchanges. Typically, many transactions do not have internal supervision regulations.

However, some exchanges, even if they have established internal supervision regulations as required, are just going through a transitional situation and have not made it based on the actual case based on the results of the risk assessment.

Therefore, if there is a hacker attack on investors, it may be worthless, which is the most significant security issue facing investors.

The Japan Financial Services Agency said that it would strengthen cooperation with foreign regulators to review the exchanges in the future and ensure that the exchanges operate in strict accordance with regulatory measures.

Via: cointelegraph