Bitbank, bitFlyer CEOs Part Ways with Japan’s Cryptocurrency Self-Regulator

Japan Virtual Currency Exchange Association (JVCEA), which acts as a self-regulator of the country’s cryptocurrency industry, needs to find new chairs after two of the authority’s most senior directors resigned.

A report for Cointelegraph says Bitbank CEO Noriyuki Hiroyuki and bitFlyer CEO Yuzo Kano are leaving after their respective exchanges received regulatory warnings.

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The association confirmed the news but has not named any executives to fill both vacancies. The JVCEA said in written statement yesterday “In response to the fact that vice chairmen of the association, Yuzo Kano and Hiroyuki Noriyuki, representative directors of Bitflyer Co. Ltd. and Bitbank Corporation, received business improvement orders concerning their virtual currency exchange businesses, we inform you that we have received resignation requests from both of the vice presidents on this date and have accepted them.”

The self-regulating association added that it would continue to do its utmost to protect the interests of users and to “promote the sound development of the virtual currency exchange industry, including the early establishment of voluntary regulation rules.”

Part of the current clampdown, the Financial Services Authority (FSA) last week issued business improvement orders to six other exchanges. The list included Japan’s biggest bitcoin exchange Bitflyer in addition to QUOINE, Bitbank, BTCBOX, BITPoint Japan and Tech Bureau.

Responding to strict measures put in place by the FSA, bitFlyer, which handles nearly $2 billion a day, has announced a service suspension for new clients after the watchdog criticized the exchange for lacking the proper internal control systems. The FSA also ordered bitFlyer to make improvements in areas from risk management to prevent the criminal use of digital money.

The news comes as Japan’s warthogs continue to challenge exchanges to prove their security credentials in the wake of Coincheck’s $530 million hack in January. The huge scale of recent hacks led the regulator to begin on-site inspections on all cryptocurrency operators, which then revealed a host of problems with security, corporate governance, and internal controls.

Several crypto venues have opted to exit the Japanese market as a result of FSA inspections and requests, as they thought they would be unable to meet the regulator’s endless demands.