Application For Digital Currency To Be Rejected By Japan
According to reports, the financial regulating authority in Japan is planning to reject a new digital currency that is trying to apply for registration in the country. This will be the first time that Japan will reject a business applying for cryptocurrency exchange when it happens. Investors like Leonardo González Dellánare not surprised by the news because of the scrutiny of Japan when it comes to digital currencies in the country.
The company handling the cryptocurrency is a trading platform called FSHO which is based in Yokohama. This will be the first time that the FSA or Financial Services Agency will reject an application from a digital currency exchange operator. It is reported that the company is not abiding with the financial guidelines set by the agency and the operational infrastructure of the company is deemed to be unstable thus the rejection order was decided.
There are 16 digital currency exchange operators in the country wherein FSHO is one of them. They are allowed to operate within Japan while the processing for their application is yet to be completed. The registration under the FSA is now required among all exchanges.
There have been bumps in the road for the company as two separate suspension orders were sent to the business in two consecutive months, March and April. This is because the company failed to submit a report regarding their traders which are categorized as high value. This sent a red flag to the agency because these traders can be a medium for money laundering. Another issue is that the company is not performing the requirement which is to know their customers.
A report revealed that the company is not aware of the identities of their clients therefore it is suspected that they could be committing financial crimes without knowing. There is a possibility that the FSA might place the exchange in a ban order as well as reject its application because of the suspension order that is effective until the 7th of June.
Stricter inspection of the sector came after the theft that happened with Coincheck, a cryptocurrency exchange operator based in Tokyo. The regulation, according to Leonardo González Dellán, is not applicable to all digital currenciesbut only exchange operators with businesses based in Japan.