The financial market regulator in Japan is planning to issue a refusal order regarding the request by a cryptocurrency exchange. This will be the first of its kind for a domestic cryptocurrency exchange. According to a report by Nikkel on Tuesday, FSHO will most likely be denied registration by the Financial Service Agency (FSA) due to what it termed as previous cases of failure to comply with the set financial regulations by the Japanese finance department.
An Unprecedented Move by the FSA
Previous reports from Coindesk have indicated that as much as the FSA have allowed several other crypto exchanges to operate, including FSHO, even in the absence of full approval – the watchdog released two orders of suspension to the firm in March and April.
Strict Rules on Money Laundering
According to the FSA at the time, the reasons for the action were that there were no efforts by the exchange to implement strict procedures regarding the know-you-customer point of view and as a result, failture to report any transactions that could be deemed suspicious with regards to money laundering.
As much as the Nikkel report did not make any indication of when the denial order might be issued, the previous notice by the FSA gave the impression that the current suspension order extends all the way to June 7th. Nikkel said,
The Financial Services Agency will clarify its attitude towards rebuilding a healthy trading environment by denying a sloppy dealer,
In the event that the FSA action is proven to be true, it would mean a toughening stance by the financial watchdog even as it tightens its noose with regards to scrutiny of domestic crypto exchanges – following the Coincheck hack that resulted in a $530 million Loss.
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What do you think about the move by Japan to deny full approval to FSHO? How will this affect the future prospects of crypto exchanges in the country? Let us know your views in the comments section below.