[2018-03-28] Report: Two Japanese Crypto Exchanges to Shut Down

[ivanpoldark]

Two cryptocurrency exchanges in Japan are reportedly set to cease operating amid growing scrutiny from regulators in the wake of a $500 million theft.

According to Nikkei, two exchanges - Mr. Exchange and Tokyo GateWay - are withdrawing previously filed applications with Japan's Financial Services Agency (FSA) in which they sought approval to launch services to domestic customers.

No official statements have been published by either exchange as of press time, though Mr. Exchange posted on March 8 that it had received an order requiring it to beef up its internal protocols in the wake of the attack on Coincheck in late January. The incident resulted in approximately $533 million worth of the cryptocurrency NEM token being stolen.

Per Nikkei's report, the closures won't occur until user funds have been withdrawn or otherwise returned.

Still, the development is notable, as earlier this month, Japanese regulators suspended two cryptocurrency exchanges, FSHO and Bit Station, citing security flaws. According to Nikkei, Bit Station has withdrawn its application with the agency, as have two others: Raimu and bitExpress.

"More are expected to follow, as the FSA has given several exchanges a chance voluntarily close before ordering them to do so," the news service added.

Exchanges in Japan are required to register with the FSA, as mandated by a law that went into effect last March. While a number of exchanges have received licenses to date, the agency has nonetheless stepped up its oversight of the industry in the wake of the Coincheck hack.

https://www.coindesk.com/report-2-japanese-crypto-exchanges-shut/

[Palmerson]

Japan started well but ended badly the legalization of the use of cryptocurrencies. It seems to me that now all cryptocurrency exchanges will move to offshore jurisdictions. This will help to compensate these countries for losses from the fight against the withdrawal of capital. We can also get a simplification of the terms of use of cryptocurrencies.

[FrueGreads]

I don't think they are doing a bad job. Everyone keep criticizing regulation but we actually need it. We can't see another Mt. Gox, and if these exchanges can't provide a good service then it's perfectly normal that they close. I'm actually tired of seeing exchange hacks being taken so lightly, as if it was ok for it to happen. Most of the times they happen because the exchanges running them, weren't competent enough in the first place.

This will spook a lot of people in the short term, but this will increase confidence in the crypto markets in the long run. If we want crypto markets to be sustainable, we need regulation.

[Schirer]

I don't think they are doing a bad job. Everyone keep criticizing regulation but we actually need it. We can't see another Mt. Gox, and if these exchanges can't provide a good service then it's perfectly normal that they close. I'm actually tired of seeing exchange hacks being taken so lightly, as if it was ok for it to happen. Most of the times they happen because the exchanges running them, weren't competent enough in the first place.

This will spook a lot of people in the short term, but this will increase confidence in the crypto markets in the long run. If we want crypto markets to be sustainable, we need regulation.

I agree with you, the regulation is needed because of several factors but on the other hand it should be implemented in a rational way - that the regulatory requirements are not overly strict or complicated.

I am not saying that they are such in the case of Japan, maybe they are maybe not.

In nay case I hope there will be working licensed exchanges in Japan since it is a major region for cryptos.

[seoincorporation]

I see it as a normal process of normalization. While those exchanges are closed due to the insecurity issues, Yahoo Japan is willing to open its new one, a promising one. I believe it is wise to generate high standards to exchanges in order to stop the massive hacking problems having place since Mt Box. I would not be surprised if Yahoo, the big monster, absorb other exchangers when implement.
Anyway, regulations are going to happen, for they are needed in order to increase the trust of the users. If we all want to see crypto being used for the common people, we, unfortunately, will need big names involved in.

[veleten]

Binance first,now Mr. Exchange and Tokyo GateWay as well
I hope this is not a trend and Japan is not doing something
that will hurt their image as one of the most friendly to bitcoin and cryptocurrencies country
regulations and security checks are all nice and dandy,but they should not serve as a pretext to stop businesses from operating in the country
Binance experienced it first hand,even if one of the largest exchanges in the world cannot get a break from the goverment,then the  goverment is doing something wrong
throwing the child out along with the bath water

[Kevinbind]

Japan (and the rest of the worl as well) needs logic, strict and powerful regulation. Untill that moment we all will have a complete mess

[FrueGreads]

Binance first,now Mr. Exchange and Tokyo GateWay as well
I hope this is not a trend and Japan is not doing something
that will hurt their image as one of the most friendly to bitcoin and cryptocurrencies country
regulations and security checks are all nice and dandy,but they should not serve as a pretext to stop businesses from operating in the country
Binance experienced it first hand,even if one of the largest exchanges in the world cannot get a break from the goverment,then the  goverment is doing something wrong
throwing the child out along with the bath water

Well, the problem is that being big in crypto markets is not the same as being big in stock markets. We know binance is a very large exchange, one of the largest in the world as you said, but every time I hear traders talking about crytpo exchanges, I hear them saying that these exchanges lack in security and features, when compared to stock markets, and that they wouldn't risk putting their money on them. Usually the exception they mention is coinbase, and I'm also hearing some good things about the future of poloniex, but only because they were bought by circle.

Not defending Japan here, and time will tell if they are changing their policies or not, but maybe crypto exchanges just need to mature a bit more.

[BitHodler]

Japan is taking it seriously, which is a great way to build a stronger foundation of exchanges, and that's something we definitely need. If I look at how shitty exchanges hold more than $1 billion in value, I just get disappointed.

It shows a weak point in this market that potentially could lead to massive losses if they either take a run, or just let it go down due to their incompetence. On the other hand, people should be more careful too.

Why should you use an exchange that isn't registered and licensed? It makes zero sense, and I learned from that after BTC-E got raided by the authorities. If they got their hand on the user's funds, they would have kept it.

[jjacob]

Why should you use an exchange that isn't registered and licensed? It makes zero sense, and I learned from that after BTC-E got raided by the authorities. If they got their hand on the user's funds, they would have kept it.

It is a trade off you have to make. Exchanges like Binance have high liquidity (so you can sell your coins easily), generous withdrawal limits and a responsive customer support team. They may be unregulated, but people place importance on the above attributes. Binance may be unregulated, but a lot of people won't be bothered about that.

[veleten]

Japan is taking it seriously, which is a great way to build a stronger foundation of exchanges, and that's something we definitely need. If I look at how shitty exchanges hold more than $1 billion in value, I just get disappointed.

It shows a weak point in this market that potentially could lead to massive losses if they either take a run, or just let it go down due to their incompetence. On the other hand, people should be more careful too.

Why should you use an exchange that isn't registered and licensed? It makes zero sense, and I learned from that after BTC-E got raided by the authorities. If they got their hand on the user's funds, they would have kept it.

there is a slight difference between being licenced,which is the first prerequisite to operate legally in a country
and get the rules changed AFTER you have been licenced and started operating
what Japan is doing,its tightening the screws
for security or for any other reason-we do not have the inside info
but you will agree that any licensed,trusted,big or small exchange can be hacked and lose money regardless of the rules and regulations
all the regulations are there to have a somewhat better control of the moneyflow and of your personal data (remember the facebook incident?)
was Gox untrusted or unregulated?

BTC-E case is very different as it was a blatant robbery by the US authorities,simply because they target russians nowadays whenever they can
had nothing to do with the exchanges' security or trust-geopolitics at its worst

[Betwrong]

I don't think they are doing a bad job. Everyone keep criticizing regulation but we actually need it. We can't see another Mt. Gox, and if these exchanges can't provide a good service then it's perfectly normal that they close. I'm actually tired of seeing exchange hacks being taken so lightly, as if it was ok for it to happen. Most of the times they happen because the exchanges running them, weren't competent enough in the first place.

This will spook a lot of people in the short term, but this will increase confidence in the crypto markets in the long run. If we want crypto markets to be sustainable, we need regulation.

I agree, we shouldn't think short-term theses days. All those measures are mostly good for the future of crypto currencies. Many potential users restrain themselves from using cryptos exactly because of the cases like with Coincheck, when $533 million worth of NEM were stolen. People have the right to feel protected from such incidents. The exchanges in question, Mr. Exchange and Tokyo GateWay, were ordered to improve their data security on March 8 by the Japanese Financial Services Agency and I guess failing to do so they've decided to shut down. That is the right decision imo.