Japan’s financial regulator has reportedly investigated two domestic cryptocurrency exchanges to check consumer protection and legal compliance, Cointelegraph Japan reported on April 23.
According to anonymous source originally speaking to Reuters, the investigation by the Financial Services Agency (FSA) on April 17 involved trading platforms Fisco and Huobi Japan, the local off-shoot of Chinese exchange Huobi.
Fisco Digital Asset Group (FDAG) has been working with Tech Bureau Inc., the operator of the previously hacked Zaif exchange, to officially transfer the business to the former group.
Both the Fisco and Huobi Japan platforms had previously undergone restructuring of senior management, with the FSA focusing on internal structures as part of an ongoing quest to shore up the local cryptocurrency industry.
According to Reuters, inspectors also targeted Anti-Money Laundering systems, while suggesting there were insufficiencies but not going into detail about potential violations.
“The FSA conducted detailed checks with a view to administrative setup, considering that there are insufficient points in the management systems of the two companies and their efforts to protect customers,” the publication reported, summarizing the available information.
Fisco and Huobi Japan had not responded to Cointelegraph Japan’s request for comments by press time.
As Cointelegraph previously reported, Japan has set about distributing licenses to exchange operators under a scheme originally announced in 2017.
At the same time, the regulator is keeping a close eye on developments, as well as introducing further rules on specific aspects of exchanges’ activities.
This week, the aforementioned domestic platform Zaif confirmed it was ready to resume operations after it suffered a major hack last year. Coincheck, which lost over $530 million in its own security breach in January 2018, received its FSA license at the start of this year.
Article First Published here