Japanese regulator Financial Services Agency (FSA) is considering the possibility of changing the legal basis for the regulation of cryptocurrency exchanges in the country, writes Cointelegraph citing local newspaper Sankei.
The FSA, presumably intended to regulate the exchange cryptocurrency in accordance with the Law on the Financial Instruments and Exchange Act (FIEA), and not with the law on payment services, which is used now. According to Senkai, this means that exchanges will be forced to use more reliable tools to protect their customers. FIEA requires that financial companies dispose of customer funds separately from their own funds.
In accordance with the current legislation, cryptocurrencies have the same legal status as electronic money. If the FSA reconsiders its approach to regulating this industry, then the cryptocurrencies will have the status of a financial product. At the same time, FIEA will open up opportunities for the issuance of cryptocurrency derivatives, such as exchange traded funds (ETF).
Sankei said that hacking Coincheck exchange in January this year FSA forced to reflect on the status of the revision cryptocurrency and legal framework for the regulation of trading platforms. After hacking FSA carried out a check of 15 unregistered exchanges of cryptocurrencies and revealed a number of violations in their activities.
In June, the Japan Virtual Currency Exchanges Association announced the creation of a new set of recommendations for local market participants. They are aimed at ensuring the safety of clients and marketplaces to maintain measures against money laundering, in particular provide for restrictions on trade in anonymous cryptocurrency like Monero and Zcash.