Based on reports from the Financial Services Agency (FSA), the FSA visited Fisco, the Japanese investment firm that took control of the hacked Zaif exchange in April. After several investigations, the agency discovered that the firm had committed a number of violations.
The FSA reportedly found problems with the firm’s business management. For instance, the board of directors were not discussing crucial management issues such as business plans.
The company was also lacking risk management features that deals with potential issues like money laundering and financing of terrorism. Similar issues were found in other aspects of general business management like the company’s outsourcing process.
Business Improvement Order handed over to Fisco
The FSA claims the company’s management did not recognize the importance of legal compliance. Therefore, to ensure the company moves in line with expected standards, the agency handed Fisco a business improvement order. This makes it mandatory for the company to establish a system that carries out proper internal management, outsourcing, accounting and auditing. The firm is also expected to set up risk management systems for fiat and cryptocurrency.
According to Coindesk, in September 2018, Zaif lost approximately 7 billion yen ($62.5 million) in bitcoin (BTC), monacoin (MONA) and bitcoin cash (BCH). A month after the incident, Fisco announced its intention to take over the ailing firm. It eventually finalized the acquisition in April, at this point the company resumed operations for the first time since the hack.
According to reports from Reuters in April, the FSA were also investigating Huobi Japan alongside Fisco. Although, no public statement has been made by the agency concerning such reports.