Audited Japanese Exchanges Are Waiting For Application Approval
Within two months, regulators of Japan are to approve or reject applications of seven digital exchanges wishing to obtain a license, Cointelegraph Japan reports.
The Financial Services Agency of Japan (FSA) has developed a long procedure consisting of two stages, obligatory for candidates for a state license. It took about half a year, and in the first four months the exchange operators had to prepare and submit answers to more than 400 questions.
After reviewing the answers, the regulator conducted an audit of the companies, during which it checked their business plans, governance, requirements for cybersecurity and anti-money laundering, as well as measures against terrorism financing. Also, representatives of FSA personally controlled the implementation of these standards in practice.
In 2018-2019, 21 Japanese crypto exchanges participated in the competition for a license, of which only seven went through the first stage of audits. Their applications passed to the decision phase, after which digital platforms may get approved by the authorities. It is noted that, with a favorable outcome, the exchanges will begin to work under a license from the summer of 2019.
In Japan, all digital exchanges must be licensed. Last year regulators tightened requirements for crypto companies several times to prevent hacking and theft from trading platforms.
Earlier in 2018, there was a high profile cyber attack on the Coincheck exchange, during which hackers stole more than $530 million in cryptos. After restoring and strengthening security requirements, Coincheck managed to regain the license.