June 22, 2018 4:19 a.m. ET
TOKYO—BitFlyer, Japan’s biggest Bitcoin exchange, said Friday it is suspending account creation for new customers after regulators told it to improve its system security and management structure.
Japan’s Financial Services Agency said it found problems in bitFlyer’s security system, including measures to prevent money laundering, terrorist financing and unauthorized access. It also said that bitFlyer prioritizes cost savings, and that the company management’s ability to monitor operations is insufficient.
In a statement posted on its website, bitFlyer said, “Our management and all employees are united in our understanding of how serious these issues are.”
The company said it has “temporarily suspended account creation for new customers” so that it can address the issues identified by regulators.
The Financial Services Agency on Friday also issued business-improvement orders to five other cryptocurrency exchange operators, including Tech Bureau Corp.
Japan is one of the more friendly environments for Bitcoin. Rules put in place last year established Bitcoin as a legitimate payment method in Japan, helping the digital currency flourish in the country. Typically between two-thirds and three-fourths of Bitcoin trading is yen-denominated, according to Coinhills.
The FSA, however, has stepped up its warnings against many cryptocurrency exchanges after Japanese exchange Coincheck Inc. was hacked and lost cryptocurrency worth some $530 million in January.
The price of Bitcoin recently fell below $6,500, according to research site CoinDesk. Its low for the year came in early February at just under $6,000. After surging nearly 1,400% last year, Bitcoin has lost more than half its value in 2018.