GMO Coin seeks to respond to Japanese regulatory action, files business improvement report
Following a business improvement order issued earlier this month by the Kanto Local Finance Bureau, GMO Coin has submitted the required report.
GMO Coin, the virtual currency business of GMO Internet Inc. (TYO:9449), is seeking to comply with a business improvement order issued earlier this month by the Kanto Local Finance Bureau. The company published a brief update on its website today saying that it submitted a business improvement plan.
The plan concerns the establishment of an effective management system, as well as the creation of a contingency plan to be implemented in case of a system failure. The plan also includes improvements to the information security and cyber security systems of GMO Coin, as well as enhancements to the quality management and configuration management systems.
The Japanese regulator has voiced concerns about the system troubles occurring frequently as a result of the rapid expansion of the virtual currency exchange business. According to the regulator, the root cause analysis for these problems was inadequate and appropriate measures to avoid recurrence of the incidents were not taken. As a result, the regulator has instructed GMO Coin to establish an effective system risk management system. The company will also have to report progress and implementation status of this plan on a monthly basis.
Let’s recall that on January 4, 2018, clients of GMO Coin had some rough time, as they were unable to connect to the services for about five hours. GMO Coin did not specify the particular reason for the problems but said that it managed to restore the normal operations around 19:00 (local time) on the same day.
In the meantime, the social media channels of the company were flooded with angry comments of disgruntled traders.
The company reported similar issues in November. On November 13, 2017, its customers experienced problems with exchange rates and connecting to the platform. GMO Coin has dubbed the incident a “system failure” but did not provide any details on the cause for what had happened. The service was restored several hours later.