To fortify the process of registration screening for the cryptocurrency exchanges in Japan, the financial regulatory authority, the Financial Services Agency (FSA) is taking steps ahead, reported The Japan Times on September 2.
The revised Payment Service Act is in effect since April 2017 to ensure maximum protection of the cryptocurrency users.
Regulators have increased the questionnaire for the applicant to about 400 items, sources revealed to the local media. Adding to it the report mentions, “It (authority) now obligates applicants to submit minutes of board meetings so it can check whether enough discussions have been held about measures to sustain the company’s financial health and ensure the security of its computer system, the sources said.”
Following the cyber attack of about $530 million (¥58 billion) in January from the Tokyo-based Coincheck exchange, the FSA’s screening process was on hold which is now resumed.
In the fresh screening process, FSA verifies the authenticity of the answers by conducting on-site inspections of the applicants. Earlier, rules were much more flexible and covered only basic questions related to applicant’s financial status and system security measures.
Speaking about the upgraded screening process sources told The Japan Times, “The upgraded screening process also regularly reviews the composition of an applicant company’s shareholders while examining if an internal system is in place to check for links to antisocial groups.”
With the expanding crypto market, numerous companies are showing interest in registering as the crypto exchange. And the analysts feel that, these strict measures will drive many of them away.