Taking into account recent crypto coin robberies, the Financial Services Agency (FSA) of Japan has decided to put tougher regulations on crypto exchanges, as Nikkei Asian Review reported on May 6. The financial institution has presented five strict guidelines which legitimize digital currency transactions on the country’s financial market.
The move is seen as an attempt to prevent any possible security problems like those that appeared at Coincheck in January this year. Hackers stole almost $530 million in NEM tokens from the fintech company.
The rules will come into power when the FSA restarts accepting new registration applications. The event is expected to happen already this summer. According to the new framework, all digital currency exchanges will have to satisfy the following five requirements:
Crypto exchanges are not allowed to keep virtual coins on a computer that is connected to the internet. Furthermore, they need to create multiple passwords for transferring any amount of trade coins.
Crypto exchanges need to increase control over anti-money laundering means, especially for large transactions.
Crypto exchange operators need to check customers’ account balances many times a day in order to observe any signs of scams or diversions.
Cryptocurrencies of high anonymity are to be banned due to their possible use for money laundering.
Crypto exchanges need to keep shareholders apart from management and system development roles from asset management roles for workers not to take advantage of the system.