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Financial Regulator in Japan (FSA) Reveals Crypto Regulation Plans

The Financial Services Agency (FSA) of Japan discloses the new cryptocurrency regulations plans to enhance the legislations.

Author: Sohrab Khawas

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    According to the recent news from Japan, currently, there are three cryptocurrency operators that are under revision. Meanwhile, there are 160 institutional firms that are looking to get the place in crypto space.

    However, the regulators in Japan are planning to add further personnel to help examine new applicants. Additionally, the process of self-regulatory plan submission for cryptocurrency exchanges is ongoing.

    On September 12, the top financial regulator of Japan, the Financial Services Agency (FSA), revealed various documents during its fifth crypto study meeting. However, there were many topics that were into discussion include:

    1. Self-Regulatory Rules by Japan Virtual Currency Exchange Association (Jvcea)
    2. FSA Reviews the Cryptocurrency Exchanges
    3. Expansion of the Cryptocurrency Team

    Self-Regulatory Rules by (Jvcea)

    During the meeting, the authorities also discussed the establishment of self-regulatory rules.  Japan Virtual Currency Exchange Association (Jvcea) will take the initiative to monitor new self-regulation.

    At the moment, the association members are 16 cryptocurrency exchanges which hold the government approval. However, they are namely:

    • Bitflyer
    • Bitbank
    • Bitpoint Japan
    • Bittrade
    • Btcbox
    • Bitarg Exchange Tokyo
    • Bitgate
    • Bitocean
    • DMM Bitcoin
    • Fisco Virtual Currency
    • GMO Coin
    • Money Partners
    • Quoine
    • SBI Virtual Currency
    • Tech Bureau
    • Xtheta

    According to Impress Corporation, the president at Money Partners and the association, Yasunori Okuyama keeps his long list of self-regulatory rules before the meeting attendees. One amongst the rules represents the cryptocurrency administration at exchanges, saying:

    When handling a new virtual currency, after conducting an internal review by the member, it is necessary to notify the association beforehand, and if the association gives an objection, it will not be handled.

    The next rule refers to the concerns of customer assets management. The association demonstrates that additional restrictions will be applicable including margin trading measures for cryptocurrency within the compliance. The administrative guidelines and the fund settlement law will be in compensation with this.

    However, cryptocurrency exchanges should combat financing of terrorism (CFT) measures, the anti-money laundering (AML) policies together with rules relating to anti-social forces. Some other rules include

    • The ones winding basic transactions
    • Dispute resolution
    • Solicitation and advertisement
    • Trading guidelines
    • Ethics
    • Tips to handle initial coin offerings (ICOs)

    Meanwhile, the association announces that these self-regulatory rules will come into action at an early stage to accomplish the accreditation of the association. However, they also agree to say some rules might stretch longer to comply.

    FSA Reviews the Cryptocurrency Exchanges

    During the meeting session, present state of cryptocurrency exchange registrations and regulations were also a point of discussion. Amongst 16 firms holding the authority to operate cryptocurrency exchanges while their application request is under revision, only three of them survives to come out of the recent inspections by an agency.

    Coincheck, Everybody’s Bitcoin and Lastroots are the cryptocurrency exchanges under revision. The FSA states that it is currently evaluating the work improvement report of Coincheck and, will move ahead. However, it will potentially conduct on-site inspections regarding the registered exchanges.

    Evaluating 16 firms, agency rejects one of the firms and three mentioned above are further under revision. However, the other 12 have withdrawn their request applications. Additionally, there are approx. 160 firms expressing interest in registering cryptocurrency exchanges.

    Expansion of the Cryptocurrency Team

    The vice commissioner for policy coordination at FSA, Kiyotaka Sasaki states at the meeting saying biggest issue comes on how to deal with new operators. He also notes that the authority at the moment holds 30 personnel whose work includes

    • Monitor crypto exchanges and traders
    • Supervise unregistered operators
    • Review registration applications

    However, looking into 160 firms seeking to enter the market; FSA is ready with plans to add on the workforces for reviewing applicants. The FSA is also trying to request and accomplish 12 additional personnel by the coming financial year 2019. However, they are focusing forward to swiftly answer cryptocurrency exchange operators.

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