Provisional Translation

Q.

An outflow of funds about 58 billion yen from the quasi-virtual currency broker dealer Coincheck occurred, and the Financial Services Agency (FSA) yesterday issued an order for business improvement to Coincheck. Shortcomings have been pointed out in Coincheck’s security system, so could you please tell us how you see the future of virtual currency broker dealers and what kind of oversight approach you think the FSA should adopt?

A.

It was very regrettable that a large-scale outflow of virtual currency from Coincheck occurred on last Friday. In the light of the details reported thus far from Coincheck, we issued an order for business improvement to Coincheck requiring them to look into the causes of the incident, adopt measures to prevent recurrence, and take steps to protect their customers. The FSA has been having our IT system experts verify virtual currency broker dealers’ IT systems during registration screening and post-registration monitoring. We think that virtual currency broker dealers should further enhance the level of their internal control of their IT systems. Accordingly, we requested that virtual currency broker dealers besides Coincheck make urgent self-check of their systems, and we will consider conducting on-site inspections as needed. In any case, the FSA continues to conduct proper monitoring of virtual currency broker dealers for the sake of protecting users. In addition to this, with regard to the dealing of virtual currency, it is very important to make the right balance between user protection and user convenience.