Japanese Regulators Crackdown On 7 Crypto Exchanges, Shut Down 2 More

Following yesterday's extremely heavy volume (Tokyo Whale?) plunge in Bitcoin, regulators in Japan have cracked down on seven cryptocurrency exchanges (and ordered month-long suspensions for two more).

Interestingly, prices were relatively stable as the news hit (perhaps yesterday's selling was pre-emptive?)

As CoinTelegraph reports, the Japanese Financial Services Agency (FSA) has sent “punishment notices” to seven crypto exchanges and temporarily halted the activities of two more after a round of inspections prompted by January’s Coincheck hack, CNBC reports Thursday, March 8.

The FSA issued business improvement orders for a lack of “the proper and required internal control systemsto seven exchanges, including Coincheck, which was specifically cited as lacking a system for preventing money laundering and the financing of terrorism.

image courtesy of CoinTelegraph

Exchanges Bit Station and FSHO are to be closed for one month from today, according to CNBC. The FSA reported that a senior Bit Station official used exchange customers’ Bitcoin (BTC) for personal purposes, and Bit Station has ended its application for registering as an exchange.

The hack of more than $500 mln of NEM from the Japanese Coincheck crypto exchange has been attributed to the fact that the coins were stored on a low-security hot wallet. In the aftermath of the hack, the FSA inspected Coincheck and ordered all Japanese crypto exchanges to submit reports on their risk management systems.

The FSA also announced in mid-February on-site inspections of 15 Japanese crypto exchanges, those currently awaiting registration, of their computer safety system measures.

Coincheck had promised customers to refund all stolen coins, a statement supported by the FSA, who confirmed through CNBC that Coincheck had enough funds to do so and would be releasing a reimbursement plan later today.


HRClinton hedgeless_horseman Thu, 03/08/2018 - 10:56 Permalink

The terms "Money Laundering" and "Terrorism" are but excuses to front-run the real problem on the fiat horizon:

Massive escapes from the Fiat Slave Plantation, to the freedom of the Decentralized Parallel Economy -- by lawful people, who choose to repudiate and leave one for the other.

Their pretext only hurts them. But a mass, biblical Exodus kills them. Savvy?

In reply to by hedgeless_horseman

StackShinyStuff Justin Case Thu, 03/08/2018 - 11:12 Permalink

So keep the records.  If you know that this data is being kept somewhere (E.g. you trade on Coinbase), follow the rules.  You can download the data from them. You may not like the tax laws, but having to pay tax on gains is a good problem to have. Now this is trading.  As for other activities they deem taxable (making purchases with Bitcoin, etc), fuck-em.  They have not the manpower or the data to track shit like that.

In reply to by Justin Case

Txpl9421 Justin Case Thu, 03/08/2018 - 11:13 Permalink

Just like any other sale they provided a 1099-k.  Its up to the investor to make sure the movements are covered in the taxes.

The BIG issue is if they record transfers of bitcoin as if they were transfers of cash.  If you move your bitcoin from an exchange to a private wallet, that could show as BIG money, when it really isn't.

Report your gains.  Keep records.  It really isnt that big of a deal.

In reply to by Justin Case

PT Thu, 03/08/2018 - 10:48 Permalink

Cheapest way for a govt to own Bitcoin:  Make it illegal and then just take it all.

(Yes, yes, IF they can find it.)

When govt wants something but doesn't want to pay for it,  they make it illegal and then take it.

silverer Thu, 03/08/2018 - 11:20 Permalink

This is how they deal with gold's digital analog. If regulators don't like it, it's because the banks don't like it. Nothing to do with representing the general population's wishes.

wmbz Thu, 03/08/2018 - 11:24 Permalink

The sooner all crypto exchanges understand that they must pay graft to the right folks in the chain of command, the better off for them.

If big gubmint thinks you are giving them the finger and not greasing their palms, then they will cut you off at the knees.

Government is set up to be our overlords, and will extract their pound of flesh.