The Financial Services Agency of Japan has recently published a new draft report with information on the country’s latest regulatory framework for cryptocurrencies and initial coin offerings (ICOs).
While Japan has been known as one of the biggest supporters for cryptocurrency, the country has had some serious problems dealing with malicious hackers this year. Because of this, policies have been tightened in order to restore consumer protections.
The newly issued draft covers several topics, some of these include hacking and how to regulate operators whose registrations are pending.
Bitcoin.com has provided further information on this issue, stating that the draft was addressed during the 11th study group meeting of the FSA where it was met with minimal objection.
Here are some highlights from the draft:
- The FSA urges exchanges to ‘join the certified [self-regulatory] association,” Japan Virtual Currency Exchange Association (JVCEA). The FAS will work work together with the self-regulatory association. Operators that fail to register with the association can be shut down.
- The FSA will impose net assets for each crypto exchange “equal to or more than the amount equivalent to the currency and repayment funds” to give consumers protection against a hack.
- The FSA determines that three dealers who are awaiting regulatory approval – Coincheck, Lastroots and Everybody’s Bitcoin – are no longer able to grow their business until they are fully registered with the FSA. Specifically, the exchanges are prohibited from listing additional coins.
- The FSA may apply securities regulations to initial coin offerings (ICOs) through “administrative measures.”
It’s quite understandable why this issue has been drafted by the FSA. With the hacking two of its exchanges during this year alone, increasing security would be the highest priority to ensure the safety of customers.
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