There have been some rapid developments in the cryptocurrency industry in Japan. About 5 Cryptocurrency exchanges are about to close down in Japan. These exchanges have already taken the initiative and withdrawn their applications.
Apparently, it seems that these exchanges are not keen to register their specific exchanges. The Japanese Financial Services Agency has given leverage to these exchanges to shut their operation voluntarily before it orders these exchanges to shut down.
There is a strong reason why these exchanges are forced to shut down operation. The problem with Mr.Exchange and Tokyo Exchange is that they have security loopholes. Initially, the regulation authority asked these exchanges to bring about improvement in their data security mechanism, but these exchanges failed miserably in this regard.
The other exchanges that have failed to live up to the expectation of the regulatory authority include the names of Bit Station, BiteExpress, and Raimu. However, all these exchanges that are closing down are encouraged to give the cash to the clients before they close down their operation.
Mr.Exchange also stated to put forward their point of view. The exchange mentioned the fact that they did try to bring about improvement in their operation, but the problem is that it is difficult for them to comply with the requirements in the long-run.
This is why closing the exchange down is one action that is deemed necessary at this point. The cryptocurrency is now considered a legalized way to make payments. This is why it is necessary for the exchanges to register with the financial authority.
Now, all this seems to be quite an alarming situation. There are 11 other exchanges as well that have applied for withdrawal to the Japanese Financial Services Agency. All this is quite alarming, but the truth is that all these exchanges are in quite a vulnerable situation.
The list of 11 exchanges includes the name of Coincheck also. This exchange suffered hacking way back in January. This exchange lost about 58 billion Yen due to hacking. This incidence was one of the reasons why the financial regulatory authority started to scrutinize the operations of the exchanges.
One thing is quite clear, and that is the exchanges need to stick to the regulatory authority requirements if they want to survive in the crypto world. If they fail to follow the rules, then their future is doomed for all times to come.