The Financial Services Agency of Japan temporarily suspended the trading activities of 2 cryptocurrency exchanges. It also sent a notice to another cryptocurrency exchange. Ever since the hack of $ 534 million from a Japanese cryptocurrency exchange, the regulators in Japan have become much more alert to the risks revolving around cryptocurrencies.
Also, Japan is one of the 1st countries to introduce the proper regulatory framework for cryptocurrency exchanges. The cryptocurrency exchanges have to register with the authorities. Only once they are able to get the permission from the authorities to operate, they can go ahead and offer their trading platform to the normal investors. This is the reason why the authorities have the power to suspend the operations of the cryptocurrency exchanges.
External Link and FSHO are the 2 cryptocurrency exchanges which have received the order to halt the operation by the financial services agency of Japan. Currently, according to the order, the suspension will last for at least 2 months. According to the orders, both the cryptocurrency exchanges are ordered to halt for at least 1 or 2 months. In a related development last week, 2 Japanese cryptocurrency exchanges even proactively shut down their operations. The reason for this is that they were not able to comply with the rules and regulations of Japanese authorities. As a result, they decided to proactively shut down the operations rather than continuing with the operations which are not compatible with the rules and regulations in the country.
Japanese citizens are investing in cryptocurrencies in a heavy manner. As a result, any loss of momentum or any shrinkage in the investment opportunities will have a significant impact on the cryptocurrency market. This is the reason why investors all over the world are trying to gauge the extent of the regulatory framework which is being unveiled by Japan. This move by Japanese authorities will send signals to other cryptocurrency exchanges as well. As a result, most of the other cryptocurrency exchanges will try to abide by the rules and regulations. One more cryptocurrency exchange by the name of Last Roots was asked to improve their business practices. It remains to be seen whether the cryptocurrency exchange will be able to improve the performance or whether it will also be sent a shutdown notice.
With regulatory authorities in Japan becoming more and more strict, it will be up to the cryptocurrency exchanges to proactively abide all the rules and regulations in order to avoid such a shutdown order by Japanese authorities.