Japanese authorities issue punishments to several cryptocurrency exchanges

Officials of the Financial Services Agency enter Coincheck's headquarters to conduct a search, in Tokyo's Shibuya district on February 2, 2018. Japanese authorities on February 2 raided virtual currency exchange Coincheck, a week after the Tokyo-based firm lost 530 million USD in cryptocurrency to hackers.

The Japanese board of regulators on Thursday issued punishment notices to several cryptocurrency exchanges and forced others to halt business, in an effort to shore up consumer protection after the $530 million theft of digital money from Tokyo-based bitcoin exchange Coincheck.

 

A senior official at the Financial Services Agency told reporters at a briefing on Thursday it had confirmed Coincheck had funding to reimburse its customers for digital NEM coins stolen from its exchange. It said the company would announce details of its reimbursement plan later in the day.

The regulator issued business improvement orders to Coincheck and six other exchanges, saying the seven exchanges lacked the proper and required internal control systems.

It ordered the suspension of operations at two of them, Bit Station and FSHO, for one month starting Thursday.

FSA said a senior employee at Bit Station was found to have used customers’ bitcoin for the person’s own purposes. The agency said the exchange, which has been allowed to operate on a provisional basis, dropped its application to become an authorised exchange.

The FSA said Coincheck lacked a proper internal control system for risks such as money laundering and terrorism financing.

Officials of the Financial Services Agency enter Coincheck's headquarters to conduct a search, in Tokyo's Shibuya district on February 2, 2018. Japanese authorities on February 2 raided virtual currency exchange Coincheck, a week after the Tokyo-based firm lost 530 million USD in cryptocurrency to hackers.

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