The memory of the Coincheck incident, which involved losses of over $500 million still looms over Japan. The authorities there stepped up the issue of legal orders to businesses they find lacking in proper security measures.
The latest business to be hit by the Kanto Local Finance Bureau, a branch of the Financial Services Agency, was Everybody’s Bitcoin Inc.
The company received a sanction due to unsatisfactory security practices, including insufficient prevention of money laundering, after the FSA conducted an on-site inspection.
“We have confirmed the business management status of the company through reporting based on [...] on-site inspection and found gaps in the business’ effectiveness in ensuring compliance with laws and regulations, and proper operation, such as failing to perform appropriate verification of account holders. In addition to the inadequate management system, it also has problems preventing money laundering and terrorist financing, bookkeeping, providing appropriate information to users, [and] effective control over system risks,” the order said.
To fix the situation, Everybody’s Bitcoin was asked to:
- Build a business management system,
- Create an effective framework for combating money laundering and the financing of terrorism,
- Create a framework for adequate bookkeeping,
- Implement measures to protect users from breaches, and
- Create an effective system for outsourcing and system risk management.
Further digging reveals that the company was founded in December 2016 by Ito Makoto, with a capital of around 130 million yen (~$1,190,000). Although no known URL exists in public registries, we managed to find that the company registered “min-btc.com” as its domain name. The website states that the company has a cryptocurrency trading platform that boasts the “world’s fastest trading engine.”
The only thing that really looks “off” is that the company doesn’t register a lot of chatter on social media. For a company that’s been operating for two years in one of the world’s most bustling cryptocurrency markets, it only has 194 likes on its Facebook (NASDAQ:FB) page. It has no Twitter presence to speak of, and chatter is minimal.
Though the attention from the FSA will push the company to get its operations in order, and hopefully serves as a warning to similar firms. On the other hand, a month ago, the same agency served a warning to Binance—one of the most well-known cryptocurrency exchanges in the world—for operating without a license. Things like these are signs that the industry is still going through growing pains and regulators are doing their best to ensure that the market doesn’t get riddled with hacking incidents like those that happened at Mt. Gox and Coincheck.
This article appeared first on Cryptovest
