Skip to main content
  1. Home
  2. Computing
  3. News

Japan to crack down on cryptocurrency exchanges after high-profile hacks

Jayce Wagner
By

After major cryptocurrency exchange Coincheck suffered massive losses to hackers last month, the government of Japan is set to introduce punitive measures to a few crypto exchanges as a push for greater investor security. Some exchanges might actually be forced to suspend business as a result, according to Reuters.

“The [Financial Services Administration] will mete out the punishments after uncovering flaws in customer protection and anti-money laundering measures during on-site checks at the exchanges,” Reuters reports. “After the Coincheck heist, the FSA said it would investigate all cryptocurrency exchanges for security gaps. As a result of those checks the FSA will order some of the unregistered exchanges to halt their operations”

Recommended Videos

Japan’s crackdown on cryptocurrency exchanges comes in the wake of several high profile hacks and data breaches. Coincheck, one of the largest cryptocurrency exchanges in Japan, lost an estimated $425 million in NEM tokens to hackers in January 2018. The hackers accessed an unsecured “hot wallet” — a cryptocurrency wallet used to store funds for purchases or exchanges — and made a series of transfers before Coincheck caught on to the breach.

Related

“The exchange has promised to repay about $425 million of the cryptocurrency it lost in the theft. Last month it said it has sufficient funds to make the repayments, but declined to specify when it would repay investors affected,” Reuters reports.

In 2017 Japan became the first country to officially start regulating crypto exchanges at the national level. To date, 16 exchanges have registered with Japan’s regulatory agencies. Another batch of 16 exchanges have submitted applications, and were permitted to continue operating while their applications were under review by regulators.

“After the Coincheck heist, the FSA said it would investigate all cryptocurrency exchanges for security gaps, and ordered them to file reports on system risk management and cryptocurrency storage,” Reuters reported. “The FSA told Coincheck after the cyber heist to bolster its security systems. The second improvement order will focus on customer protection, the sources said, with the FSA monitoring progress of compensating investors affected by the hack.”

These moves by financial regulators in Japan underscore just how new all of this is to government agencies. Cryptocurrencies have been around for several years now, but governments are still struggling to rein in cryptocurrency exchanges and enforce strict security regulations to protect investors.

Editors' Recommendations

Topics
Jayce Wagner
Jayce Wagner
Former Digital Trends Contributor
A staff writer for the Computing section, Jayce covers a little bit of everything -- hardware, gaming, and occasionally VR.
Another partner backs out of Facebook’s Libra cryptocurrency
Facebook Libra

Yet another company that signed on as a partner in Facebook’s proposed cryptocurrency known as Libra has backed out of the association. The British telecommunications operator Vodafone announced its departure from Facebook’s Libra Association on Tuesday, Coindesk reports. In total, eight companies have now backed out of the Libra partnership. 

"We can confirm that Vodafone is no longer a member of the Libra Association. Although the makeup of the Association members may change over time, the design of Libra's governance and technology ensures the Libra payment system will remain resilient," the Libra Association said in a statement. "The Association is continuing the work to achieve a safe, transparent, and consumer-friendly implementation of the Libra payment system.”

Read more
Get paid in cryptocurrency for viewing ads in the new Brave browser
earn cryptocurrency in brave browser blocks google

Brave Software officially launched version 1.0 of its Brave web browser on Wednesday, November 13. The first version launched in January 2016 and has since gained more than 2.8 million active users daily and eight million active users monthly. It’s based on Google’s Chromium browser and relies on Basic Attention Tokens (BAT) to generate revenue.

The idea behind Brave’s BAT system is to reward content creators using cryptocurrency. It doesn’t generate virtual coins in the background, but rather provides means for readers to tip 300,000 participating Brave Certified Publishers. These include The Washington Post, The Guardian, MarketWatch, and more.

Read more
Bitcoin has a massive carbon footprint. This clever new cryptocurrency doesn’t
A broken Bitcoin over a grey background.

Bitcoin is undoubtedly exciting, but, as much as it might promise to solve some of the problems associated with global finance, it’s also responsible for creating problems of its own. The most concerning of these is the environmental impact of mining cryptocurrency due to the huge amounts of electricity it requires. This, in turn, results in tens of millions of metric tons worth of carbon dioxide being pumped into the atmosphere.

That’s a big cause for concern, and it’s something that researchers at Switzerland’s Ecole Polytechnique Fédérale de Lausanne have been working to come up with a solution for. In contrast to the large electricity consumption and carbon footprint of Bitcoin, they are developing a new approach to cryptocurrencies they hope could lead to a near zero-energy alternative.

Read more