A new set of laws have been approved for implementation on crypto exchanges and their cold wallets by the Japanese Financial Services Agency (FSA).
As stated by Reuters, Japanese regulators will require cryptocurrency exchanges to reinforce the internal security of their cold crypto wallet – offline digital assets storages – by the nation’s regulators.
With the introduction of the new rules, the FSA will strengthen its abilities and resources to combat many issues regarding cryptocurrency security, along with many potential threats and ultimately trigger economic development that would benefit the fintech industry.
Despite the fact that cold wallets are offline storages with no Internet access, and has been proved to be a more secure method of data safekeeping, the FSA believed the internal factors can pose just the same level of harm to them. Specifically, the FSA revealed that the personnel in charge of guarding these wallets are not frequently substituted, as it is not written in the policies at a majority of firms.
Back in March 2019, The FSA has reportedly greenlighted Japan’ second crypto exchange platform, which will operate under the newly adopted crypto regulation. They are also starting to giving out new licenses to crypto companies looking to function in the Japan market. The licensing plan is an attempt by the Japanese government to enhance the nation’s crypto scene after the incidents over the past 2 years, especially after the cyber attack that caused $500 million financial damage to the local exchange Coincheck in January 2018.