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   902

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.

Binance to Join Forces With IdentityMind

IdentityMind provides exchanges with ability to comply with KYC\AML worldwide
26 March 2019   86

Binance announced an agreement with IdentityMind, which will help it ensure compliance with regulatory requirements and improve data security.

IdentityMind provides cryptocurrency exchanges with access to the platform, thanks to which they can monitor compliance with customer identification and anti-money laundering requirements in real time. This includes connecting new customers, managing their profiles and monitoring transactions.

The partnership between Binance and IdentityMind further strengthens our compliance capabilities and our commitment to re-invest in the blockchain ecosystem and grow it. We continue to evolve and enhance security systems while adhering to regulatory mandates in the countries we operate in. The goal is to foster greater trust among financial institutions worldwide.

Samuel Lim

Chief Compliance Officer, Binance

Last year, Bloomberg wrote about the Binance user identification system as the least strict in the entire industry, and linked the “level of anonymity” provided by the exchange with the risks of money laundering and market manipulation.

In October, Binance entered into an agreement with a supplier of transaction analysis software on the blockchains Chainalysis, and in November with Refinitiv, which developed an automated solution for client verification.

Whether the ordinary users of the platform will feel the impact of the integration of IdentityMind tools on themselves, the exchange does not specify.