Japanese authorities issue business improvement order to GMO Coin
The order, issued today by the Kanto Local Finance Bureau, stems from deficiencies in the risk management system of the virtual currency business.
The Japanese authorities have stepped up their efforts to handle problems in the virtual currency sector. Earlier today, the Kanto Local Finance Bureau announced penalties against a number of cryptocurrency businesses, including GMO Coin, the virtual currency business of GMO Internet Inc. (TYO:9449).
The announcement by the regulator voices 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 issues a business improvement order to GMO Coin, instructing it to establish an effective system risk management system. In addition, the company has to submit a written business improvement plan by March 22nd this year.
The company will also have to report progress and implementation status of this plan on a monthly basis.
Commenting on the regulatory action, GMO Coin apologized to its customers for any trouble caused and sought to reassure its clients that there will feel no negative impact as a result of the regulatory decision.
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.