Japan's FSA to Propose Exchange Regulation Program

Financial Services Agency created five criteria, that should be applied to all cryptocurrency exchanges, operating in Japan
07 May 2018   1018

The for Financial Services Agency of Japan (FSA) plans to tighten the requirements for local exchanges. According to Nikkei, this is done in order to reduce the risks of large-scale hacker attacks.

In January, the Coincheck exchange was hacked, as a result of which it lost more than $ 500 million in the cryptocurrency. After this incident, the FSA began active operations in the Japanese market.

At the same time, Japan adheres to an open approach to crypto-currencies and does not plan to impose a complete ban on trade, instead taking a number of steps aimed at protecting investors. To this end, the FSA has developed a program of actions to regulate the exchange of cryptocurrencies, consisting of five criteria.

First, the exchanges will be obliged to adhere to high security standards. These include the inadmissibility of storing assets on online wallet and two-factor authentication.

Secondly, the exchanges will have to strengthen measures to identify customers. This requirement is mainly aimed at combating money laundering.

Third, the FSA requires that exchanges follow the methodological guidelines for asset management. So, client assets should not overlap with the company's own assets. The balances on customers' accounts will be checked by exchanges on a daily basis, which should help them to fight the manipulation. In addition, regulators want the exchanges to use mechanisms that will not allow their employees to carry out transactions with their clients' assets.

Fourthly, the regulator insists on the withdrawal of certain crypto-currencies from the bidding. In particular, its attention was attracted to anonymous crypto-currencies, which can also be used for money laundering. Regulated sites with such cryptocurrency will not be allowed to operate.

Finally, the fifth criteria refers to the organizational structure of exchanges. FSA encourages trading platforms to transparency and clarity. For example, the regulator wants the exchanges to clearly share their shareholders and managers, as well as employees involved in software development and asset management. This is done to prevent insider trading and other forms of internal manipulation.

Commenting on the new program, the FSA source said that in the future the agency intends to adhere to a more objective approach to the regulation of exchanges.

It is expected that the new requirements will come into effect as soon as the FSA starts accepting new applications for the registration of exchanges. They also apply to existing sites.

China to Finance Hacker Attacks on Exchanges, - FireEye

Experts believe that the victims of APT41 are industry participants, the development of which is a priority in the current Chinese five-year period
08 August 2019   266

The hacker group APT41 attacks companies in the areas of healthcare, telecommunications, fintech, media, and cryptocurrency exchanges. This activity is funded by the Chinese government, according to analysts of cybersecurity company FireEye.

Experts believe that the victims of APT41 are industry participants, the development of which is a priority in the current Chinese five-year period.

Industries Targeted by APT41
Industries Targeted by APT41

At the same time, APT41 pursues its own goals, extracting financial benefits from attacks, which is unusual for other groups under the Chinese government, according to FireEye.

APT41 is known to include at least two people with the pseudonyms Chzan Xuiguan and Wolfji. The group probably has connections with other hacker organizations like BARIUM and Winnti.

FireEye also evaluated at what time of the day the APT41 attacked the gaming industry (its core target) and businesses from other areas. It turned out that this was happening outside the framework of a standard working day - probably these people, among other things, have the main job.

APT41 Operational Times
APT41 Operational Times

According to the UN Security Council, hackers under the DPRK government stole about $ 2 billion from banking institutions and cryptocurrency exchanges.