Japanese authorities keep issuing business improvement orders against cryptocurrency firms

Maria Nikolova

The latest virtual currency business to be sanctioned is Everybody’s Bitcoin Inc.

Japan’s Kanto Local Finance Bureau has issued another business improvement order targeting a cryptocurrency firm. Earlier today, the regulator reported that such an order was issued against Everybody’s Bitcoin Inc.

The administrative sanctions are imposed following on an on-site inspection conducted by the Japanese Financial Services Agency (FSA). The check concerned the risk management system of the company. The inspection has detected a series of non-compliance issues, including problems with keeping statutory books, insufficient provision of information to clients, AML issues, lack of control over system risks, as well as problems with internal audits.

As per the business improvement order, the company has to ensure appropriate and reliable business operations via:

  • the establishment of a business management system;
  • the establishment of a management system to combat money laundering and terrorism financing;
  • the implementation of bookkeeping management system;
  • the establishment of a management system related to user protection measures;
  • the creation of a risk management system and an outsourcing management system.

The company will have to provide a written report to the regulator not later than May 14, 2018, informing it of its progress with regard to the above-mentioned measures.

In its official comment about the penalty, the company said it accepts the sanctions solemnly and sought to assure its customers that the actions of the regulators will not influence the services it offers.

The Japanese authorities have issued a raft of business improvement orders over the last months following the theft of cryptocurrency from Coincheck. GMO Coin, the virtual currency business of GMO Internet Inc. (TYO:9449), was among those companies targeted by such orders. GMO Coin was instructed to establish an effective system risk management system.

Coincheck was eventually acquired by online trading services provider Monex Group, Inc. (TYO:8698), with the JPY 3.6 billion deal completed on April 16, 2018.

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