Japanese Financial Services Agency is now planning to regulate cryptocurrency exchange under a different law.
According to reports, that the Financial Services Agency (FSA) is considering a shift in crypto regulation. However, the following the Payment Services Act, the FSA would regulate crypto exchanges through the Financial Instruments and Exchange Act (FIEA). Further, the FIEA would provide exchange customers bullish protection like stringent investor protection system.
“The FIEA obliges securities companies to manage customer funds and securities, such as stocks, separately from corporate assets”.
Particularly, this approach is due to series of attacks on exchange in the island nation. Therefore, including the Coincheck heist in which hackers stole $530 million worth of NEM tokens.
At present, crypto assets are considered as electronic money but should the FSA change regulatory basis to fall under the FEIA. Therefore, it will be creating will be treated as a financial product. With the main intention to open a door for trading cryptocurrency derivatives like futures and exchange-traded funds.
Following the Coincheck hack, the FSA had held investigations where it found concerning problems over exchanges. It further resulted in the suspension of several exchanges and warnings in order to reappraise their security protocols.
FSA Head opts the Successor
Altogether, a self-regulating body put together in March has been working towards keeping exchanges in the FSA’s requirements to know your customers and security rules. However, the FSA will regulate cryptocurrencies comes as the agency’s current minister.
And for the first time in the recent history, Nobuchika Mori plans to name his successor and step down after two years of acting. He further took his position with a goal to support fintech growth in Japan.
Image Source: FSA