BitFlyer stops accepting new customers over Japan FSA notice

Japan’s Financial Services Agency [FSA] called for improved measures at cryptocurrency exchanges across the country. These measures were for the prevention of money laundering.

This marks a concrete move into enforcing AML in Japan, as the regulator moved struck 6 exchanges with business improvement notices. This also represents the higher security standards which are beginning to be enforced since January’s Coincheck hack, where the exchange lost $532 million worth of NEM tokens.

The exchanges that were slapped with the business improvement notices were Bitflyer, QUOINE, Bitbank, BTCBOX, BITPoint Japan, and Tech Bureau. The companies were given a deadline of July 23rd to submit their improvement plans.

Out of these 6 exchanges, Bitflyer, currently, the 6th largest Bitcoin exchange, took quick action. They stated that it would stop accepting new customers and review identity verification for selected existing users. Yuzo Kano, CEO of Bitflyer, said in a tweet [trans.]:

“We are very sorry to bother you about this time. We will do our best to take this disposition seriously and improve it.”

They were previously called out in April by Japanese reporting portal Nikkei on the holes in their customer verification. It was reported that users could perform certain limited functions without completing the customer verification process completely.

In April, the FSA also ordered the halt of two crypto exchanges over the results of investigations. They also sent out a business improvement notice to another exchange. Since April of last year, all crypto exchanges in Japan must be registered with an FSA license.

Ryan Rabaglia, a cryptocurrency trader said:

“The market is still trading on low volumes and has yet to break out of its current downtrend, leaving itself susceptible to sell-offs. Although the market reacted negatively, I view this as a positive for the industry as a whole.”

Tiantian Zhang Kullander, a partner of Amber AI Group said:

“The market is quite soft, with liquidity lower across the board, especially compared to recent quarters. The FSA punishing operators, the BIS report and the Bithumb hack are all affecting sentiment.”

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