The Japan Financial Services Agency requires virtual currency exchanges to strengthen cold wallet management to prevent misconduct among insiders

According to an official from the Japan Financial Services Agency, the Financial Services Agency asked a virtual currency exchange to strictly establish internal company regulations and manage virtual currency with a cold wallet that is not connected to the Internet. Since the violent outflow of virtual currency occurred in the past year, the Financial Services Department and the self-regulatory regulator have requested that customers who manage through the Internet restrict virtual currency and strictly manage keys. However, after reducing the use of virtual wall managed by hot wallet and changing to cold wallet management, there is a risk that insiders will illegally withdraw funds. The results of the investigation conducted by the Financial Department on enterprises show that some enterprises have not made regulations such as regular replacement of responsible persons. To prevent the misconduct of insiders, the Financial Services Department requires companies with problems to make improvements. The Financial Services Department also requested the Virtual Currency Exchange Association to establish an information disclosure system as soon as possible.