Following the massive theft of customer assets held with Tokyo-based cryptocurrency exchange operator Coincheck Inc., the Financial Services Agency plans to conduct on-site inspections at some other exchange operators this week based on the revised law on fund settlement, sources with knowledge of the matter have said. The FSA will check safety measures for the cryptocurrency exchange operators' computer systems and their methods for managing customer assets, and will apply administrative penalties if problems are found, the sources said. On Jan. 26, Coincheck lost almost all of the NEM coins belonging to some 260,000 customers, worth around ¥58 billion at the time, due to a hack of the company's computer system. On Feb. 1, the FSA ordered the 31 other virtual currency exchange operators in the country to check their safety systems -- including measures to guard against hackers, how customer assets are managed, and other areas -- and report the results to the agency. The agency examined the reports and found it necessary to carry out detailed inspections on some operators in order to prevent another theft of customer assets, according to the sources.

Nasdaq has launched a service to help fund managers and quantitative traders better use data from social media, central bank announcements, retail sentiment and other sources to improve trading profits. The Nasdaq Analytics Hub will use machine intelligence, a subset of artificial intelligence, to derive signals from end-of-day data that market participants can use to enhance investing strategies, the exchange operator said. It analyzes social media sentiment, central bank communications, retail sentiment, technical factors, and event based signals. The Nasdaq Analytics Hub will use machine intelligence to derive signals from end-of-day data that market participants can use to'enhance investing strategies'. The data from Nasdaq and third party providers are vigorously vetted with the help of financial technology startup Lucena Research, Mike O'Rourke, global head of machine intelligence and data services at Nasdaq, said in an interview.

Nasdaq has set up a new programme designed to uncover worthy investments across emerging financial technologies and services. The US-headquartered exchange operator said in a statement on Wednesday that it plans to make minority investments from below the $1 million mark up to about $10 million through its new Nasdaq Ventures programme. Initial areas of focus include blockchain, machine learning and artificial intelligence, emerging and frontier marketplaces, data, analytics and content aggregation. Every potential investment will be subject to "rigorous review", Nasdaq said. An internal committee will be tasked with ensuring that each partnership reflects Nasdaq's overall financial and strategic goals.

The news was revealed by two exchange operators who are planning to apply artificial intelligence tools to perform market surveillance in the coming months, and according to a Wall Street regulator, they are not far behind, Reuters reports. The intentions of the use of the software is to for instance search through chat-room messages to detect any "bragging or back slapping" around the time of the launch of a big trade. It will also be able to unravel complex issues more efficiently, such as incidents called "layering" where orders are rapidly sent to exchanges to then get cancelled in order to artificially move a stock price. Tom Gira, executive vice president for market regulation at the Financial Industry Regulatory Authority (FINRA) believes that AI might even have the ability to detect new types of cicanery. "The biggest concern we have is that there is some manipulative scheme that we are not even aware of," he told Reuters.