Japanese Financial Services Agency (FSA) is planning to force cryptocurrency exchanges to tighten their security, particularly by strengthening internal oversight over cold wallets, a source told Reuters.
Although last year the FSA restricted the use of hot wallets in favour of cold storage, it seems crypto asset security is still not strong enough. Now, the FSA requires strengthening internal regulations that govern cold storage safety, fearing internal theft. According to the source, some exchanges did not require rotation of people in charge of the storage.
There are currently 19 registered crypto exchanges in Japan, some of them not yet operational. Those lacking sufficient security measures will be asked by the FSA to amend that.