Japan-Based Crypto Exchanges to Be Constrained in Hot Storage
October 2, 2018
The Japan Virtual Currency Exchange Association (JVCEA) is going to toughen requirements for token trading. A number of big licensed Japan-based platforms will limit the amount of assets each exchange of the association is allowed to operate with within 24 hours.
Possible restrictions are supposed to make from 10 to 20 % of customer investments. The association is now reviewing new rules and plans to present them to the Japan’s Financial Services Agency (FSA).
Some share of user funds is stored at hot wallet while the bulk of them are held offline with cold storage option. Hot wallet always requires internet connection which makes its funds vulnerable for hacker attacks. So that is the kind of wallets the JVCEA is going to set limits for.
The need in new measures has got especially obvious after recent hack of Zaif digital exchange in Japan. The amount of funds stolen from hot wallets was about $60 million in BTC which has made the exchange resort to the lender to restore losses for its users.
Earlier hackers hijacked $523 million in NEM from Coincheck hot wallets.