Two Japanese cryptoexchanges to shut down

According to reports, two Japan-based cryptocurrency exchanges are set to stop operating amid increasing investigation from regulators following a $500 million theft.

Two exchanges – Tokyo GateWay and Mr. Exchange – are reportedly withdrawing earlier filed applications with the FSA (Japan’s Financial Services Agency) in which they attempt to get permission to launch services to domestic clients.

As of press time, no official statements have been made by either exchange, though Mr. Exchange released a statement on March 8 that it had gotten an order requiring it to standardize its internal protocols following the hack of Coincheck in late January. The incident led to the loss of nearly $533 million worth of the cryptocurrency NEM token.

The closures, as reported by Nikkei, won’t happen until the complete withdrawal or otherwise return of user funds.

Nevertheless, this is a notable development, as Japanese regulators suspended two cryptocurrency exchanges, FSHO and Bit Station, earlier this month, regarding security flaws. Nikkei reported that Bit Station had withdrawn its application with the FSA, as have two other exchanges: bitExpress and Raimu.

The financial news service added that more exchanges are expected to do the same, as the FSA has given many crypto-exchanges a chance close voluntarily before ordering them to do so.

Japan-based exchanges are obligated to register with the FSA, as mandated by a bill that was passed in the country last March. While some exchanges have gotten licenses to date, the agency has nevertheless stepped up its regulation of the cryptocurrency industry following the Coincheck hack. If you’re looking for a good cryptocurrency exchange, check the list of our professional cryptocurrency exchange reviews.