Japan's Financial Services Agency is set to issue its first rejection of a business registration application filed by virtual currency exchange operator, Nikkei reports.
The regulator concluded that Yokohama-based FSHO lacks the systems it needs to operate its business. FSHO is already under a business suspension order by the agency after the FSA found the exchange didn't sufficiently verify the identity of customers in transactions where crime is suspected, or in cases where deposits may be diverted, Nikkei says.
The suspension period is due to end tomorrow, after which the FSA will prohibit the exchange from operating and deny it a registration.
Regulators are increasing scrutiny over crypto transactions as initial coin offerings and other cryptocurrency-related businesses proliferate In May, it was reported the U.S. DOJ is in early stages of a criminal probe into whether traders are manipulating the price of bitcoin and other cryptocurrencies. And the U.S. SEC has warned investors about the warning signs of crypto scams using a mock website.
Previously: Novogratz sees DOJ Bitcoin manipulation probe as a good thing: Bloomberg (May 24)
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