Japan’s financial regulator, the Financial Services Agency (FSA), has laid out yet further regulatory stipulations for domestic crypto exchanges.
The FSA is intensifying its efforts to prevent a repeat of January’s $532 mln hack of cryptocurrency exchange Coincheck.
The new framework entails investor protection measures and attempts to rehaul exchanges’ internal management systems.
Exchanges will now be required to monitor customer accounts multiple times daily for suspicious fluctuations, manage client assets separately from those of the exchange, and store crypto holdings on offline systems only. They will also face stricter anti-money-laundering (AML) measures, which demand know your customer (KYC) checks, such as ID verification, and multiple-password protection for large transfers.
These measures also confirm that government-registered exchanges will now face tight restrictions – effectively a ban – on the trading of anonymity-oriented altcoins, such as Dash (DASH) and Monero (XMR).
The regulator will send inspectors to both new and existing exchanges to check compliance with the new measures.