Japan FSA to Introduce 5-Point Criteria for Crypto Exchanges, Crypto Price is Down

Cryptocurrency prices fell on Monday (7/May), Ripple and Ethereum declined by more than 10%. The overall decline in price of crypto is due to sentiment from Japan which is reported to be setting a stricter regulation for the crypto currency exchange platform (crypto exchange).

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Avoid Coincheck Similar Incidents

The Japan Financial Services Agency (FSA) is ready to introduce stricter guidance for the local crypto currency exchange platform to prevent possible hacking like Coincheck. As is known, Coincheck, a Japanese based crypto exchange, was hacked in January and resulted in the theft of digital coins worth more than $ 530 million, or Rp. 7.1 trillion.

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The FSA introduces the "5 Point Agenda" to strengthen the crypto exchange rules, which will include stronger security standards, such as two-factor authentication for currency transfers, and systems that ensure coins are not stored in online wallets because of hacking havoc. In addition, a more comprehensive Know Your Consumer (KYC) process will also be developed to eliminate the risk of money laundering.

Agenda 5 FSA Points

In recent years, Japan has established itself as a country that is friendly to crypto currency. The new measures taken by the FSA are intended to clear markets, protect investors, and prevent money laundering. To make this happen, the FSA has released a new 5-Point Agenda to regulate the scope of kirpto exchange.

• The crypto currency exchange platform will adhere to strong security standards. This standard includes ensuring that coins are not stored in online wallets, and creating two-factor authentication (2-FA) for currency transfers. The reason, the storage of crypto currency online is notorious for hacking, while 2-FA is able to prevent unauthorized crypto transfers.
• The exchange platform must develop Know Your Customer (KYC) process, to eliminate the risk of money laundering. Thus, a strict Customer Protocol ID appears to transmit a large crypto value transfer.
• The FSA will need a crypto exchange platform to adopt certain Best Practices related to asset management activities. Accordingly, the customer's assets must be managed separately from the stock exchange's assets.
• Restrictions are made on certain crypto currency. The FSA has blacklisted for some privately-focused crypto currency and can provide complete anonymity, so it is prone to be used for money laundering.
• Exchange and operational platform structures must be clear. The FSA establishes, there must be a separation between shareholders of the management team, to prevent insider trading and other internal system manipulation forms.

source : http://bitcoinist.com/japan-introduces-five-point-agenda-for-cryptocurrency-exchange-regulations/