Japan’s Financial Services Agency (FSA) has officially announced the rejection of a cryptocurrency exchange application.

The regulator rejected FSHO’s application stating that the entity falls under the category of "a corporation that has not been established a system to properly and reliably carry out the virtual currency exchange industry.”

FSHO is one of the many companies that had received business improvement order from the FSA earlier this year. The regulator had ramped up its regulatory activities in the crypto space following the Coincheck hack in January.

The FSA had sent two suspension orders to FSHO in March and April, respectively, CoinDesk reported. However, the agency found that the company made no progress in improving its operations during the suspension period.

Following the April suspension order, the FSA claimed that it instructed setting up of a new management team for the company in May and authorized delegated auditors and lawyers. It said that FSHO not only did not cooperate with government officials, but also the former team remained in control and moved forward without the consent of new delegates.

Earlier this month, FSHO’s former management held a general shareholder meeting where it moved to invalidate the formation of the new management team.