Coincheck Receives FSA’s Order To Improve Secuity Measures

Financial Services Agency (FSA), the integrated financial services regulator of Japan, has temporarily shut down two cryptocurrency exchanges, FSHO and Bit Station, in an effort to streamline cryptocurrency trading in the country. Additionally, Coincheck, which lost about $533 million worth NEM (XEM) tokens in a hacking incident, has received an order from the FSA to improve security measures.

Coincheck has also suspended processing fiat withdrawals until the audit is completed. The regulator has beefed up monitoring process. FSHO and Bit Station are relatively small. However, the temporary shutdown is an indication of tougher measures that might be brought about in the near future.

A notice of suspension has been put up on the websites of FSHO and Bit Station. The FSA authorities inspected FSHO and Bit Station on February 19 and 26, respectively. While Bit Station was found to have violated financial act 63-10 (adequate security measures for protectin of clients’ cryptocurrencies) and 63-11 (management of clients’ cryptocurrencies), FSHO was found to have violated article 63-10. The FSA ordered temporary (one month) suspension of business, effective today. Both parties were asked to submit a detailed plan on March 22 to improve security measures.

Additionally, according to a Bloomberg reporter, the FSA has penalized GMO, Zaif, Bicrements, and Mr.exchange. Notably, Bitexpress has withdrawn its cryptocurrency exchange license application.

Coincheck, which is under scrutiny by the FSA authorities, has suspended fiat withdrawals until the audit is completed. Coincheck’s twitter handle has confirmed the receipt of FSA’s order to improve security measures.