Japan’s financial regulator, the Financial Services Agency, raided the offices of exchanges Huobi and Fisco last week, reported Reuters. The FSA scrutinized the exchanges’ internal governance procedures, as well as consumer screening (KYC).
The Japanese regulator has become increasingly strict, especially after the hacks of Coincheck and Zaif. Japanese exchanges are fully regulated when it comes to handling fiat, but since digital assets are so new, procedures for storage and custody are still being created from scratch. Additionally, the screening of traders has gained importance in the past year, after it became clear that unregulated exchanges could allow hackers or shady actors to liquidate assets or launder funds.
Huobi Japan was established a year ago, after the Huobi market operator, based in Singapore, acquired the Japanese market BitTrade. Fisco Cryptocurrency Exchange is the buyer and heir of Zaif, an exchange hacked last fall. The market operator will relaunch the Zaif market and brand in the next few days.
All exchanges in Japan must register with the FSA, to ensure consumer protection. Back in 2017, when Japan was the leader of the Bitcoin (BTC) trading boom, it became one of the first countries to put in place regulations for exchange operators.
Currently, the share of Japanese yen trading for Bitcoin has fallen to around 2%. However, several assets, such as MonaCoin (MONA) are having a local market where most of the volumes are in fiat pairings. In the past few days, the news of a Zaif relaunch caused MONA to spike as high as $1.32 before retreating toward $0.93. MONA fell by more than 15% in the past day.
While Zaif remains a niche exchange, Huobi Global is one of the most powerful market operators, with volumes near $1 billion. The exchange also holds one of the larger Tether (USDT) wallets, with more than 258 million coins in storage. Huobi is also one of the exchanges boosting token sales through Initial Exchange Offerings (IEO)./cryptovest.com