Two more Japanese cryptocurrency exchanges have closed

The doors have closed on two more cryptocurrency exchanges in Japan after a study by the Financial Services Agency raised questions about whether most exchanges could meet the regulator's standards.

Tighter control standards for cryptocurrency exchanges, which followed the theft of digital assets on the famous Japanese exchange Coincheck, caused the closure of two more companies, Tokyo GateWay and Mr. Exchange. This brings the total number of closed companies to five. 

Following a relatively new law requiring Japanese cryptocurrency exchanges to register with the FSA, some exchanges were unable to comply with regulatory requirements and chose to cease operations in Japan.  

As Nikkei Asian Review reports, Japan's Financial Services Agency (FSA) has ordered Tokyo GateWay and Mr. Exchange has significantly strengthened data security and improved guarantees that were found to be insufficient. Instead of making the necessary additions and updates, both exchanges have withdrawn their applications to be allowed to legally operate as exchanges and are set to return money and digital currencies to their customers. 

Currently, 16 Japanese exchanges are registered with the FSA. The five exchanges that closed had applied for registration but had not yet received it, although they were still allowed to operate pending the final review of the application. 

Following the Coincheck hack, the financial services agency conducted on-site inspections at each unregistered exchange and conducted thorough data security studies of each business to ensure compliance with the standard. According to Nikkei, FSA inspectors still find issues relating to corporate governance and internal controls, and that "some operators have little chance of meeting the agency's standards."

According to http://bitcoinist.com