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.