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Fisco, the firm that took over the Zaif crypto exchange company after it became the victim of theft via hackers, is now in hot legal water. The Financial Service Agency (FSA) of Japan has deemed it to be in violation of key regulations for anti-money laundering. As such, the watchdog has issued an order for Fisco to either shape up or face the consequences.
In the fall of 2018, Zaif came under the control of Fisco after it lost $59.7 million to hackers, Cointelegraph reports. Recently, however, the FSA decided to check on how the company was doing and discovered that it was in violation of some important anti-money laundering regulations. A lot of it had to do with lax internal management, where such as aspects as the accounting and auditing were too weak.
As a result, the agency is asking Fisco to improve in those areas with special emphasis on verification. The watchdog noted how the firm was not as vigilant as it is supposed to be in this matter, highlighting how users can simply not include their occupation or the reasons for their transaction.
“In the section where users can enter identity verification information, they can select "other" if it is not possible to check their occupation or purpose of the transaction. When "other" is selected, the account can be opened without entering anything,” the agency noted.
No specific details have been provided as to what would happen if Fisco maintains its violation of the regulations put in place to counter the usual issues related to cryptocurrency. The only real action that the agency took was to issue an order of business improvement. The Japanese government has also already approved a new bill for regulating exactly these types of cases, but it won’t go into effect until April 2020.
