Japan FSA is planning to tighten crypto exchange registration process, after revising its Payment Services Act, which has been enforced in April of 2017. FSA has added some extra features to the previous act’s legislation.
3 September, AtoZ Markets – Japanese financial markets’ regulator, the Financial Services Agency (FSA), has announced that it will strengthen the process of registration screening for cryptocurrency exchanges.
Japan FSA Will Tighten Crypto Exchange Registration Process
According to some of the local media outlets, the FSA has upgraded its registration process. The regulatory body has reportedly revised its Payment Services Act, which has been enforced in April of 2017. This has been done in order to “to see whether they [crypto exchanges] are properly conducting risk management,” according to local news reports, citing sources from the government.
The financial regulator has also added some extra features to the previous act’s legislation. This has increased “the number of questions asked when screening applications to about 400 items, up fourfold”.
The FSA has also supposedly stated that it will require access to the crypto exchanges’ board meeting records. In addition, it will need an access to the reviews of the compositions of the shareholding structure of companies in order to “check for links to antisocial groups.”
As per the local media, cryptocurrency exchanges should “submit minutes of board meetings so it can check whether enough discussions have been held about measures to sustain the company’s financial health and ensure the security of its computer system.”
FSA’s Commissioner Positive on Crypto Market Growth
Earlier last month, the FSA has published the results of its on-site cryptocurrency exchange inspections that took place after the Coincheck’s crypto exchange hack in January. The FSA has reported that it plans to closely examine the effectiveness of the newly registered cryptocurrency exchanges’ business models.
In August, the commissioner of Japan’s FSA, Toshihide Endo, has stated that he believes that the agency’s goal for developing the cryptocurrency sector is to “grow under appropriate regulation.” He has been quoted by a number of online media reports as saying that he sees the FSA’s goal for developing the cryptocurrency sector as finding a “balance” between consumer protection and technological innovation.
He has added:
“We have no intention to curb [the crypto industry] excessively. We would like to see it grow under appropriate regulation.”
FSA Crypto Exchange Regulation
Then, earlier this July, the FSA has considered changes in the legal basis for cryptocurrency exchanges’ regulations. The FSA has looked into shifting the regulation basis from the Payment Services Act to the Financial Instruments and Exchange Act (FIEA).
AtoZ Markets has reported that Japan has made changes to the way its financial regulator, the Financial Services Agency (FSA) operates. Thanks to the overhaul of FSA’s ecosystem, now, the regulator is better equipped to deal with fintech-related sectors, this including cryptocurrencies.
This implies that exchanges will feature stronger customer protection systems in the future. The FIEA requires securities companies to manage customer funds and securities separately from corporate assets.
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