Japanese Crypto Exchange GMO Vows to Improve After Regulator Orders Upgrades

The cryptocurrency exchange subsidiary of the Japanese internet giant GMO has detailed its plans to improve its operations. GMO Coin has submitted a business improvement report to the country’s financial regulator. GMO Internet has also set up an information security audit office for the entire group.

Also read: Japan’s DMM Bitcoin Exchange Opens for Business With 7 Cryptocurrencies

GMO Strengthens Operations and Security

GMO announced on Friday the establishment of its Group Information Security Audit Office “to strengthen information security management and audit function in the whole group.” The company wrote:

We will protect important customer information from increasingly sophisticated cyber-attacks by our highly secured countermeasures and pursue to improve group information security literacy and foster security personnel.

The Japanese Financial Services Agency (FSA) issued a business improvement order to GMO Coin, GMO Internet’s cryptocurrency exchange subsidiary, on March 8 after conducting an inspection. The agency began inspecting all crypto exchanges after the hack of Coincheck, one of Japan’s largest crypto exchanges. The FSA mandates the “Implementation of Effective System Risk Management Structure” under Article 63-16 of the Law on Funds Payment. GMO Coin obtained a license from the FSA in September of last year.

Headquartered in Tokyo, GMO is one of Japan’s largest internet companies. It operates GMO Click, which is “The largest FX trading services provider for retail investors in Japan,” the company’s website states. Last year, GMO also began its crypto mining operations.

GMO’s Business Improvement Plan

Following the FSA’s order, GMO Coin submitted a business improvement plan as required by the agency. The exchange will report its progress and implementation status to the regulator “every month by the 10th day of the following month in writing until the implementation of the business improvement plan” is complete, GMO Coin detailed. The first reporting date is the last day of March.

Specifically, GMO Coin plans to establish an effective risk management system. “The management team analyzed and investigated the root causes of system failures, formulated concrete countermeasures, and responded to the actual situation of business expansion,” the company described.

The business improvement plan includes “(1) business management systems, (2) contingency corresponding readiness plan [in] the event of a failure, (3) information security, cyber security management posture, and (4) quality control and configuration management systems,” GMO Coin outlined.

In its announcement, the exchange stated that they “sincerely apologize for the inconvenience and worry that our customers and stakeholders have experienced,” adding:

We deeply reflect on taking this administrative punishment seriously and will steadily implement improvement plans to strengthen and enhance the system risk management system to further enhance the service that customers can feel secure and safe [with].

What do you think of GMO Coin’s business improvement plan? Let us know in the comments section below.

Images courtesy of Shutterstock, Nikkei, and GMO.

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