Japan is taking all the measures to maintain transparency in the digital currency trading. This is one of the reasons that FSA is all set to take some strict actions. Just recently, FSA has decided to reject the application of a digital currency exchange to operate in Japan. The digital currency exchange is operated by FSHO.
FSA is of the opinion that FSHO does not have the necessary system to operate in Japan. As per FSA the operational procedures of FSHO are substandard. The Japanese Financial Service Authority is taking all these actions because it wants to establish a transparent digital currency trading environment in Japan.
At the moment FSA is taking strict actions against all the deemed dealers. Due to the strict policy of FSA, 8 of the digital currency exchanges have withdrawn their application already. The reason FSA is taking action against dealers like FSHO and digital currency exchanges is that it wants to promote the concept of licensed digital currency exchanges.
The traders have a sense of security when they trade using the licensed digital currency exchanges and they do not get the feel that there are investments are on the line. The suspension of FSHO business is also a lesson for other dealers who are currently executing substandard processes.
In fact the operations of FSHO have been suspended twice. When FSA suspended the operation of FSHO for the second time it also indicated the improvement areas. The main concern of FSA is that FSHO exchange needs to have a well-managed money management system so that there are no concerns related to any scams.
If a well-managed money system is there, then the users will not have any problems in withdrawals as well. The real problem was that FSHO failed to present the necessary changes on the said time.
Another concern for FSA was that FSHO did not have any defined process for verifying the identity of the customers during the process of transaction execution. If the company fails to bring about any changes once the suspension period is over, then it will not be granted the permission to operate in Japan.
This happening is an eye-opener for all the exchanges currently operating in Japan. They need to review their operational procedures so that FSA does not have any objections. The approval of FSA is mandatory if an exchange wants to continue its successful operation in Japan for a long time.