Japan’s largest cryptocurrency exchange Bitflyer has contested media narrates that the Japanese financial regulator has deemed its user verification system to be insufficient. Nonetheless, the exchange admitted to being in talks with the police and has implemented additional measures.
Also read: Yahoo! Japan Establishes Entrance Into the Crypto Space
Reports of Financial Regulator’s Considerations
The largest Japanese crypto exchange by volume, Bitflyer, has issued a declaration in response to media reports that the Financial Services Agency (FSA) has bid the exchange to strengthen its user verification procedure after determining it to be inadequate.
Nihon Keizai Shimbun reported last week that, opposite from many other exchanges in Japan, customers were able to barter cryptocurrencies at Bitflyer “even with insufficient identity verification.” According to Japanese law, purchasers must mail verification document to the exchange as part of the know-your-customer (KYC) demands.
While “A normal dealer will take 1 to 3 weeks” from account position to trading, the news outlet noted that trading within 24 hours is on at Bitflyer. Since speculators often try to time the market and profit in advance the price drops, “exchange operators who can start trading earliest are pulling,” the publication explained.
Bitflyer quickly contested this report, claiming that “the constituents reported are different from the facts,” adding:
The company has implemented masses such as money laundering and terrorist financing…and has been discussing with the controls concerned.
The exchange clarified that its discussion with the FSA is healthy, underline that “We are strengthening countermeasures as one of the most important management issues” from one end to the other the company.
Recently, the FSA has been actively inspecting crypto exchanges, expressly those that have been allowed to operate while their applications are subordinate to review. Among the 16 fully licensed exchanges, only GMO Create and Tech Bureau have been issued business improvement categorizes so far.
Strengthening User Verification Measures
In its statement, Bitflyer clarified that earlier to offering trading services to customers, the exchange asks for “Personal low-down, transaction purpose, occupation, [and] PEPs (those who occupy an important point of view in foreign governments etc.)” Users must also submit categorization materials by registered mail. The exchange clarified:
We provide services at best when we can confirm the agreement of the materials…If there is an error or inadequacy, serve provision will not start. Also, in the event that the address is institute unknown, the sale and purchase transaction is limited immediately.
Bitflyer above detailed its fraud prevention practice for Japanese yen withdrawals to bank accounts and unlawful IP addresses. Countries with “risks of laundering and terrorist financing are field to strict vigilance,” the exchange detailed, adding that “We will change strict verification by strengthening our customer support system in the future.”
Without considering contesting media reports, Bitflyer announced some changes “After consultation with the power,” the exchange wrote. Effective April 26, the exchange will not give customers to send cryptocurrencies or withdraw Japanese yen until their identities and hails have been confirmed by registered mail. In addition, purchasing high-value rectitudes with bitcoin through the exchange is also only possible after the the Exchange has received the customer’s registered mail.
What do you think of Bitflyer corroborating its user verification process? Let us know in the comments section below.
Figures courtesy of Shutterstock, FSA, Bitflyer.
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