Japan’s financial regulator will continue inspecting more cryptocurrency exchange operators who are potentially vulnerable to cyber-attacks and is expected to widen its inspections further. A few days ago the Financial Services Agency (FSA) pounced on Coincheck Inc to conduct surprise checks of its systems after the Tokyo-based operator’s $539 million digital money was stolen by hackers.

The theft exposed the vulnerabilities in the format of trading an asset which is where the policymakers are struggling and want to regulate. Last year, Japan became the first country to introduce regulations in exchanges at the national level. After the theft in January last month, the FSA stated that it is also planning to investigate the other 31 crytocurrency exchange operators in the country for testing security gaps.

FSA Orders Submission Of Report From Exchange Operators

According to reports, FSA has ordered the 31 cryptocurrency exchanges in Japan to submit a report on their system risk management and cryptocurrencies storage. FSA has said that it will follow up with on-site checks if any vulnerability is traced. The agency decided to start inspecting the exchanges after reviewing their reports and it is quite possible that the checks of FSA may widen further depending on the analysis of the reports.

The agency has already issued Coincheck a business improvement order as Tokyo police and other authorities in several countries are probing the theft incidence.  The explosive rise in the value of digital coins including the huge increase in the number of new retail investors drawn to the market last year have certainly made the global regulators nervous about a sector that is mostly used for speculation. According to officials, cryptocurrencies are widely used by criminals to turn black money into white.

Is Monero Replacing Bitcoin In The World Of Criminals?

Latest news suggests that Bitcoin is slowly being replaced by privacy coins such as Monero. The criminals it seems have given rise to a new breed of virtual currency. These privacy coins are specially designed to avoid tracking and hence have climbed very fast in the last two months.