Japan's Financial Services Agency will start to monitor cryptocurrency exchanges more carefully from this October.
Japan’s Financial Services Agency will start to monitor cryptocurrency exchanges more carefully from this October.
According to the Japan Times, the control over cryptocurrencies is increased due to the recent adoption of the law on revised payment services, which was adopted five months ago. The law describes the operational standards for the exchange of cryptocurrencies, and also Bitcoin is recognized as a form of the legal mean of payment.
An FSA head reportedly indicated the supervision is intended to control the exchanges as well as to ensure the robust growth of the cryptocurrency market, telling:
“We engage in both market fostering and control enforcement. … Our goal is sound market growth and development.”
The payment services law was adopted earlier this year fixed anti-money washing and know-your-client rules for the exchangers.
The law is also intended to enforce security standards aimed to protect the exchanges from the risk of cyber attack. This act also has another mission as well. It must ensure compliance with standards and security principles that are aimed at protecting exchangers from possible cyber attacks.
The law points that all exchanges have to report to the authorities by the beginning of October to confirm they are pliable with the new regulations. The FSA also has the remit to hold on-site inspections if considered necessary.
To regulate the over 20 cryptocurrency exchanges working in Japan, the FSA last month created a specialised supervision team; reportedly it has about 30 staff members.
Japan is no outsider to crypto currency based fraud, with 33 incidents, representing nearly a half of million dollars value of loses, recorded in the former seven months of 2017.
Moreover, in 2014, the now-notorious Bitcoin exchange from Japan Mt Gox collapsed, ending in the loss of millions of dollars of clients’ funds. Japanese legislators have previously fixed the exchange’s insufficiency as a main driver in the decision to regulate the crypto currency sphere.