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BitFlyer Hit With “Business Improvement Order,” Suspends The Creation of New Accounts

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BitFlyer Hit With “Business Improvement Order,” Suspends The Creation of New Accounts

Japan’s largest cryptocurrency exchange, BitFlyer, has placed a moratorium on the creation of new accounts following intervention from the country’s principal financial services regulator, the FSA.

The restriction was put in place after the FSA placed a ‘Business Improvement Order’ on the exchange on June 22, 2018. BitFlyer received the order alongside many crypto-based companies the same day.

“Voluntary and Temporary Suspension”

In a statement published on its website, BitFlyer pointed out that the suspension of new account creation was not imposed on it by the FSA, but is decision of its own volition. BTCManager earlier reported the FSA has previously had a run in with BitFlyer regarding its user verification process, which resulted in a process upgrade at the time.

Japanese financial authorities, like many around the world, are presently in the middle of a regulatory quandary regarding cryptocurrency-related companies. While a few countries like China have responded to this challenge with outright bans on cryptocurrency trading, Japan like the US, prefers to regulate the trade instead.

Consequently, the FSA is heavily invested in auditing the operations of Japanese crypto exchanges, especially regarding Anti Money Laundering (AML), anti-fraud and user security efforts. AML concerns, in particular, make up a vital part of the FSA’s engagement strategy with crypto exchanges due to fears about organized crime syndicates using bitcoin and other cryptocurrencies to launder money. This makes business improvement orders like BitFlyer’s a common occurrence.

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The BitFlyer statement reads in full:

“On June 22nd, 2018, bitFlyer, Inc. (Japan) received business improvement orders from the Japanese Financial Services Agency. Our management and all employees are united in our understanding of how serious these issues are. To maximize our efforts towards building a suitable service and improving on the issues identified, we have voluntarily and temporarily suspended the onboarding of new customers. We appreciate your understanding. This order is directed to bitFlyer Inc. (Japan) and not to its USA or European entities, which are regulated in their geographical jurisdictions.”

Effect on Bitcoin Market

Though the Tokyo-based exchange sought to clarify the restriction only affects its Japanese operations due to FSA jurisdiction, bitcoin markets still reacted negatively to the news, perhaps taking it as a security indictment on one of the world’s most important exchanges.

In a week that saw bitcoin investors counting substantial losses after its price took a battering due to the $32 million Bithumb hack in South Korea, markets are still reeling from negative pressure, and the bearish trend continued, pushing bitcoin down by 8.4 percent to rest at $6,156.

Despite the adverse price movements of bitcoin following these two events, many analysts remain cautiously confident that the world’s cornerstone cryptocurrency has finally started the process of finding its bottom somewhere between $4,000 and $6,000.

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