Japan’s financial regulator raided two cryptocurrency exchanges last week to investigate their internal oversight, including customer protection and anti-money laundering measures, two sources familiar with the matter said on Tuesday.
The Financial Services Agency (FSA) is pushing to ensure the security of virtual currencies as Japan aims to leverage the fintech industry to stimulate economic growth.
The FSA conducted inspections at Huobi Japan Inc and Fisco Cryptocurrency Exchange Inc, both of which recently underwent major changes to management structures, the sources said, declining to be identified because they are not authorized to speak to the media.
The FSA investigations were designed to ensure appropriate measures have been implemented for customer protection and legal compliance after the management changes, the sources said.
A Huobi representative declined to comment on the FSA inspections or communications with the regulator. Fisco did not respond to multiple requests for comment.
Huobi Japan was established last year after Singapore-based Huobi Group acquired the government-registered BitTrade exchange.
Fisco Cryptocurrency Exchange, owned by JASDAQ-listed financial information provider Fisco Ltd, took over another government-registered exchange, Zaif, from another company, Tech Bureau, after Zaif suffered a $60 million cryptocurrency heist.
Japan in 2017 became the first country to regulate cryptocurrency exchanges at a national level, hoping to encourage technological innovation while ensuring consumer protection. Exchanges have to register with FSA and required reporting and other responsibilities.