After Huobi, another crypto exchange KuCoin to stop trading in Japan
KuCoin, the Hong Kong based cryptocurrency exchange has announced on Twitter that they will stop trading services in Japan. KuCoin is the second exchange which will stop trading services for Japanese investors, the first being Huobi. It was reported earlier that Huobi informed its Japanese investors via email that they’ll stop trading services from July 2nd. While Huobi did not provide a reason, KuCoin said that it’ll stop services “out of respect to Japanese legislation requirements”.
KuCoin is Closing our Services to Traders in Japan
— KUCOIN (@kucoincom) June 28, 2018
Kucoin’s announcement says that they’ll reject all KYC verification requests from Japan. Further they add that their website won’t support the Japanese language as well. While it’s still a crypto friendly nation, Japan is introducing stricter guidelines for all digital currency exchanges across the nation. These guidelines are being introduced in a bid to prevent crypto hacks. Coincheck, a Japanese cryptocurrency exchange became a victim of a hack and as a result lost $400+ worth of cryptocurrency.
This instance prompted the Japanese Financial watchdog, FSA to bring in more stringent security measures in the cryptocurrency industry. According to the money transaction law introduced in 2016, exchanges should register themselves with the Financial Services Agency (FSA). World renowned crypto exchange Binance had been served with a warning from the FSA earlier this year. It warned the exchange that as a foreign entity, they were offering trading services to Japanese residents without a license.
According to the FSA’s guidelines, the exchanges shouldn’t store any digital currency in their online wallets. Moreover, the exchanges should have two factor authentication for all transfers, this ensures that unauthorized people cannot transfer any coins. To prevent money laundering and such illegal practices, all exchanges must have a detailed KYC verification. Further they have to conduct thorough identification protocols for anyone wishing to transfer large amounts of crypto coins.
All exchange platforms must follow best practices for asset management and they will not list certain kinds of cryptocurrencies. The latter rule applies for privacy coins or coins promoting total anonymity and they will no longer be listed. These coins, according to the FSA might give way to money laundering.
Image via Brian D. Colwell
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