Japanese Financial Regulator Suspends Two Crypto Exchanges

According to the order, FSHO and Eternal Link exchanges stop all operations related to virtual currency until June 7 and June 5 respectively
09 April 2018   729

The Kanto Local Finance Bureau of Japan's Ministry of Finance has published a new report on April 6, describing the Administrative Punishment for Financial Institutions and the administrative penalties. The Japanese financial regulator was investigating the activity of the exchanges, from March, and it finally announced its decision to suspend two cryptocurrency exchanges: Eternal Link and FSHO, which did not properly require customers to provide information such as purposes of trades.

According to the order, FSHO exchange stops all operations related to virtual currency from April 8 until June 7. Moreover, during the period from April 6, to June 5, all operations related to the virtual currency exchange business should be stopped by Eternal Link exchange.

There are several measures which are required from the exchanges to unsure that they are reliable:

  • Execution of confirmation at the time of trading on trading and execution of notification of suspicious transactions
  • Effective management system including money laundering and terrorist financing including review of business model
  • Secure management of user information
  • Risk management system
  • Proper implementation of legal book preparation and preservation

Moreover, according to the report, both cryptocurrecny exchanges did not implement procedures around reporting suspicious transactions to the Financial Service Authority.

Karpeles to Face Another 10 Years in Jail

Japanese enforcements agencies blamed Mt. Gox CEO in stilling $3M
12 December 2018   49

Japanese prosecutors blamed the head of the already inactive exchange Mt. Gox Mark Carpeles in embezzling 341 million yen ($ 3 million) from a bank account trading platform. The prosecutors made the corresponding statement in the Tokyo District Court, demanding 10 years of imprisonment for Karpeles, reports The Mainichi.

[Mark Karpeles] diverted company funds to such uses as investing in a software development business for personal interest" and "played a great role in totally destroying the confidence of bitcoin users.
 

Japanese prosecutors

It is noted that in September-December 2013, the head of MtGox allegedly transferred funds to personal bank accounts, and then invested in the software development business.

Carpeles is also accused of faking the data of the trading system of the exchange for the fabrication of balance sheets.

The deadline for accepting applications from affected investors as part of the civil rehabilitation of Mt. Gox has been extended until the end of December.