Two Japanese Crypto Exchanges Withdraw Applications To Operate

John Medley
  • Tokyo GateWay and Mr. Exchange have voluntarily withdrawn their applications to operate as crypto-asset exchange in Japan
  • Japan's Financial Services Agency have been enforcing higher security standards for all crypto-asset exchanges in the wake of the Coincheck hack

Since the infamous Coincheck hack in January that saw over $500 million in NEM stolen, Japan’s FSA (Financial Services Agency) has started improving the security of crypto exchanges. Nikkei reported on Thursday that two crypto exchanges in Japan have withdrawn their applications to operate.

Contrary to misleading articles, Tokyo GateWay and Mr. Exchange have voluntarily withdrawn their applications to operate as crypto-asset exchanges in Japan.

It is thought that Tokyo Gateway and Mr. Exchange had insufficient security procedures and standards making it highly unlikely that they would have met the FSA's stricter requirements. Making an application to operate a fruitless endeavour.

The FSA ordered all crypto exchanges to improve security in the wake of the Coincheck hack. Two exchanges -  Bit Station and FSHO - were suspended for 30 days and 5 exchanges - Tech Bureau, GMO Coin, Mister Exchange, Bicrements and Coincheck - had to conduct a full security audit and provide a “Security Improvement Plan” by March 22nd.

Japan’s Crypto Markets Mature Under FSA Guidance

Despite the numerous reports of Japanese exchanges being forcefully closed down the reality is different. The FSA has imposed security standards to help prevent Coincheck or MtGox style hacks. A process that has fortunately identified several security flaws in numerous exchanges. These exchanges have been left with a choice of improving security or shutting down. It is the FSA’s hope to mature the crypto market and improve standards.

As the volumes of crypto-asset trading falls and competition ramps up, the crypto exchange business model is becoming less lucrative. Analysts expect the number of exchanges to drop and the market to consolidate around a small group of exchanges. However, it is thought to be a positive progression for the market improving liquidity and security.

The Swiss Warm to Crypto Investments

The Swiss are shifting more focus to cryptocurrency investments. This is according to a survey taken on behalf of Migros Bank, which revealed that a growing proportion of Swiss residents are invested or actively looking to invest in cryptocurrencies.

The survey which was conducted by market research institute Intervista showed that 7% of savers between the age of 18-55 already hold cryptocurrencies such as ether and bitcoin. Even more encouraging was the finding that 7% of those aged between 30 and 55 plan to extend their crypto portfolios in the future.

Unsurprisingly, the survey found younger participants to be the most bullish on the long term prospect of crypto. According to 13%, aged between 18 and 29, cryptocurrencies will become more "important" in the future.

Less extraordinary were the results of the older generation. Per the survey, respondents aged over 55 were much less likely to own cryptocurrencies, and only 0.5% thought that it was a worthwhile long term investment. 

Switzerland Ups the Ante on Crypto Regs

This uptick in demand for cryptocurrency comes just after Switzerland imposes more stringent crypto regulations. 

Jumping off recommendations issued within both the Financial Action Task Force (FATF) guidance and the EU's 5th anti-money laundering directive (5AMLD), the Swiss Financial Market Supervisory Authority, or FINMA, recently opted to tighten their travel rule.

The rule, which requires crypto firms to disclose customer information for transfers above $1,000, was initially set by FINMA at a threshold of $5,000 (5,000 CHF) but has since lessened to just $1,000 per the FATF and 5AMLD directives. 

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