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Japan's watchdog to inspect cryptocurrency exchanges after Coincheck theft

Staff Writer |
After 58 billion yen worth of NEM cyptocurrency was stolen from Japanese firm Coincheck Inc.'s exchange, the Financial Services Agency (FSA) notified multiple other cyptocurrency exchange operators that it will be conducting on-site inspections as early as this week.

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As an agency investigation into Coincheck revealed the possibility that other exchanges may be operating without proper safety measures against hacking, the FSA has decided that inspections based on the Payment Services Act are necessary to immediately grasp the security situation.

The currency disappeared from Coincheck's exchange on Jan. 26. Along with issuing a business improvement order to the company on Jan. 29 for failing to implement safety measures to prevent hacking, the FSA began an on-site inspection on Feb. 2.

In addition, the agency ordered a total of 31 digital currency exchanges in Japan, both registered and pending approval, to submit reports on the management of customer assets and security as well as their financial situation.

The new inspections will target companies deemed to have issues with their management systems based on analyses of these reports.

FSA inspectors plan to interview those in charge of the exchanges to confirm systems for protecting against hacking and managing customer assets, and request improvements where they are deemed necessary.

The names of the companies that are subject to the investigations have not been released.

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