Japanese financial regulator introduces more strict rules for cryptocurrency  exchanges, including obligatory security measures, AML, KYC, and anonymous cryptocurrencies delisting starting from June.

The Financial Services Agency of Japan (FSA) tightened the rules for cryptocurrency  exchanges. The main aim is to prevent situations similar to that of hacked in January Coincheck, Nikkei reports citing anonymous official from the FSA.

Under the new rules, exchange registration process will include not only the filing of necessary documents, but also the FSA's direct visits to exchanges' headquarters for inspections. Trading platforms, wishing to obtain Japanese license as cryptocurrency trading services operators, will have to meet five criteria:

  • Enhanced security. Assets should be stored on servers that are not connected to the Internet. In addition, they must be protected with strong passwords;
  • Increased level of protection against money laundering. The exchanges will have to verify the data of customers making large transactions;
  • Increased severity of internal rules of companies. In particular, operators will be prohibited from allowing shareholders to directly manage the process;
  • To ensure that client tools are not mingled with the assets of exchanges, operators will have to constantly check the balance of customer accounts to detect any inconsistencies. In addition, the exchanges will have to introduce rules to prevent the use of client funds by employees;
  • Crypto-currencies with a high level of anonymity will be excluded from the listing (such currencies include Zcash, Monero and Dash; Coincheck has already delisted Zcash).

According to Nikkei, FSA will start using the new rules this summer, when it starts again accepting applications for registration. The cryptocurrency exchanges that received license earlier will also have to switch to new standards.

News on regulation tightening and obligatory delisting of anonymous cryptocurrencies caused a drop in prices of such coins. According to Coinmarketcap, Zcash rate within the last 24 hours decreased by 8.19%, Dash fell by 6.79%, and Monero lost 5.4%.