Japan’s Financial Services Agency (FSA) has done it again—they have given cryptocurrency exchanges in the country another set of requirements to comply on top of the already stringent regulations that these domestic crypto exchanges face.
This effort is done by the FSA to eliminate any chance of reoccurrence of the infamous $532 million Coincheck hack that happened last January.
A source from the FSA got in touch with local news outlet Nikkei that the watchdog has found identifying any potential risks in advance to be particularly challenging.
The new requirements imposed on the exchanges are to help alleviate the challenge as they focus on improving investor protection measures and properly restructuring internal management. They include:
- Suspicious transaction monitoring to be done several times daily.
- Separate asset management for client-owned assets and exchange-owned assets.
- Exclusively offline storage for cryptocurrency holdings.
- Strict know-your-customer (KYC) checks.
Given these new requirements, things are not looking good with regards to the fate of privacy coins like Monero (XMR) in Japan.
According to Nikkei, the watchdog will be sending inspectors to all cryptocurrency exchanges to ensure compliance. Many Japanese cryptocurrency exchanges have already either closed down or withdrew their applications to operate due to the intensifying regulations by the FSA. After this new set of requirements, more exchanges are expected to go down that path.