The Financial Services Agency [FSA] of Japan said that they have no intention of placing undue restrictions on the cryptocurrency industry. According to a Reuters report, Toshihide Endo, the commissioner of FSA said, “We have no intention to curb (the crypto industry) excessively. We would like to see it grow under appropriate regulation.” When asked about cryptocurrency exchanges he remarked that the FSA was trying to secure consumers while promoting technological innovations.
Japan is the first country to adopt a national system to regulate cryptocurrency trading. This was in the wake of the Coincheck hack last January which cost the domestic exchange $530 billion. Notably, the FSA issued a warning to Hong Kong-based exchange giant Binance for conducting business without a license in March. The month also saw various exchanges shut down as the government delivered punishment notices to numerous exchanges.
Earlier this month the agency published results of its on-site inspections of 23 cryptocurrency exchanges. The results prodded them to execute more stringent regulations for new applications from exchanges seeking for an operating license. Newly registered cryptocurrency exchanges will have on-site inspections at a very early stage and the agency will also have a close look at their business models. The FSA said that an ongoing review of registration procedures is necessary and it will continue to prioritize investor protection. “We will enrich document and evidence confirmation about the situation of the company’s business plan and the effective internal control system and the situation of the governance system that gives priority to user protection, performing the verification on-site and through hearings,” read the document. The FSA also added that Coincheck will be “verified separately”.
Japan’s cryptocurrency organizations are being increasingly hit with new regulations which seem to be getting more rigid with every hack and scam. Japan Virtual Currency Exchange Association [JVCEA], a self-regulatory body was developed in early March in collaboration with the FSA to develop policies. Last month they dictated their members to determine maximum limits on their trade volumes.
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