Two cryptocurrency firms in Japan ordered to cease operations

(c) 2018, The Japan News/Yomiuri.

The Financial Services Agency in Japan has ordered two cryptocurrency exchange operators to suspend operations for two months over deficiencies in how they manage customers’ assets and other reasons.

The orders to halt operations until early June were issued Friday to Yokohama-based FSHO and Tokyo-based Eternal Link Co. based on the revised Payment Services Law. The FSA also on Friday ordered Tokyo-based LastRoots Co. to improve its business practices due to similar problems.

All three companies are so-called “quasi-operators” of virtual currency exchanges, which have been granted special treatment to conduct business.

The FSA judged that FSHO’s measures against money laundering were insufficient, among other concerns, as it does not thoroughly investigate the purpose of customers’ applications. This is the second time FSHO has been ordered to suspend operations, following a previous order in March.

The watchdog also revealed Eternal Link had used money it received from customers for advertising and other expenses.

It also said another three quasi-operators have withdrawn their applications to register as virtual currency exchange operators.


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