Risk Control System

Keeping risk that affects our management within a permissible range helps us achieve our business goals. Based on this approach, we appropriately identify, analyze, and evaluate the risks stablished in the “Rules of integrated risk control” and have devised appropriate control systems for the different risks that confront the Monex Group and the group companies.


As per the flow chart below, the CEO appoints a risk control manager, and this manager is responsible for ascertaining the development and operational status related to the risk control system and regularly reporting that status to the Board of Directors.

Risk Definitions and Main Measures

The Monex Group categorizes and regularly assesses the following types of risks noted in the table below. In addition, the main measures to address those risks are also shown.


Risk Control in Crypto Asset Business Segment

Differences in risk control between a financial instruments business and cryptocurrency exchange business

The risk control as a cryptocurrency exchange service provider is similar to the risk control in FX trading in some aspects. For example, a cover transaction (hedging on a position held by a virtual currency exchange service provider to reduce risk with another service provider) for a position that is issued by trading a cryptocurrency with a customer is the same as a cover transaction for a foreign currency pair in FX trading.


However, the cryptocurrency exchange service provider has a higher liquidity risk for the cover transaction than in FX trading. For leverage, the risk (absolute amount of loss) to the trading volume is lower because Coincheck, for example, has a leverage ratio of 5x, which is smaller than the 25x upper limit in FX trading.


On the other hand, there is a noteworthy difference in managing cryptocurrency trading and FX trading, which is handling the currency in a wallet form and using blockchain to complete the transaction. When compared to a brokerage firm that primarily engages in equities trading, the stock as the primary element in that trading is managed by Japan Securities Depository Center, Inc. using electronic data. In simpler terms, the data is stored at a separate location from the brokerage firm. Whereas with a cryptocurrency exchange service provider, the cryptocurrencies are most often stored by the company itself, requiring the company to control that high risk.

Management required in the cryptocurrency exchange business

In a cryptocurrency exchange business, other  aspects need to be managed apart from the  aforementioned risk control. Even with regard  to money laundering prevention, there are more points that must be monitored in a cryptocurrency  exchange business. In a brokerage firm, the  deposit and withdrawal from a securities account  can only be completed via a bank account.
These deposits and withdrawals are not possible  if the names on the accounts do not match. Yet in the cryptocurrency exchange business, more  advanced measures to prevent money laundering  are needed because a cryptocurrency can be  remitted to a cryptocurrency address. 


In terms of system security measures, we are  making our security system stronger to conduct  appropriate monitoring, assuming there will be  multiple threats, such as hackers attempting to  attack our servers.

Differences between cryptocurrency exchange business and financial instruments business

Service content Cover
Liquidity risk Verification of person
depositing or withdrawing
Outflow risk
of assets in
risk control
Virtual currency
exchange service
Trade location and
exchange location
High Bank account/
High High
Financial instruments
Equities trading - - Bank account Low Low
FX trading Low Bank account Low Medium