Recently, the Financial Services Agency (FSA) was busy preparing a report about the latest developments in Crypto regulation in Japan. The regulator announced it is currently reviewing three Crypto operators. The agency also announced plans to increase the number of employees due to the high number of applicants. The regulator also received self-regulatory from the Japan Virtual Currency Exchange Association (JVCEA).
Three Exchanges Survive FSA’s Inspection
According to the report released by the regulator, only three out of the 16 Cryptocurrency exchanges that had applied for review, survived the agency’s inspection. Now, FSA is reviewing application by Everybody’s Bitcoin, Lastroots, and Coincheck. The agency is assessing Coinchcheck’s improvement report. Furthermore, the regulator has said that registered exchanges will start going through on-site inspections.
After approving the three companies, only 13 were left in the pool of 16 applicants. The regulator has rejected one applicant while the remaining 12 have pulled out of the application process. FSA also said that about 160 Cryptocurrency exchanges have applied for registration.
FSA To Hire More Staff
Kiyotaka Sasaki admitted that the high number of applicants has overwhelmed the regulator. According to the agency’s vice commissioner for coordination, they currently have 30 staff members. Their main role involves reviewing registration applicants, supervising unregistered operators, and surveilling Cryptocurrency exchanges and traders.
Japan’s Crypto-friendly policy has led to an increase in Crypto firms willing to join the market. Consequently, FSA has found itself in a place where it cannot adequately handle the overwhelming number effectively. The regulator is planning to hire another 12 personnel to see if it will execute its duties as expected.
FSA Went Through Self-Regulation Rules
FSA also had time to debate the self-regulatory rules created by the country’s alliance of Cryptocurrency exchanges. These are rules that are aimed at improving the Cryptocurrency trade in the country by eliminating some common challenges that expose customers to risks. The Japan Virtual Currency Exchange Association (JVCEA) is composed of all the 16 government-approved exchanges in the country.
Yasunori Okuyama explained the various measures that the association has included in their self-regulatory rules. Mr. Okuyama who is the president of the agency and Money Partners said one rule touches handling of digital assets at exchanges. The rule requests exchanges to conduct an internal review before introducing a new Cryptocurrency and notify the association in advance. According to the rule, the exchanges will not be accepting a virtual currency that the association has objected.
Another important rule that the association has passed touches on the illegal use of Cryptocurrencies. The exchanges will now have to put in place combating the financing of terrorism (CFT) and anti-money laundering (AML) measures. They will also need to address anti-social forces. Other areas covered by the new guidelines include handling of initial coin offerings (ICOs) and advertising among others.
The association has said the new rules will be enacted as soon as possible. However, it has also admitted that some rules will be implemented in a later date. By following these self-regulation measures, the exchanges in Japan and the entire association will get accreditation. The new rules will help in improving the Cryptocurrency face in the country and boost the popularity of the trade.