The financial regulator in Japan has recently disclosed the situation regarding the regulation of the crypto industry. They reviewed three main groups operators. At the same time, about 160 more companies want to enter the market. To speed up the new applicant’s review, the regulator is planning to hire more personnels. Moreover, the regulator got a self-regulatory for crypto exchanges.
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How is the crypto industry regulated now?
Financial Services Agency, which is the top financial regulator in Japan, shared some documents from their crypto study group meeting. This meeting took place on Wednesday, September 12. The participants discussed the current state of the crypto industry’s regulation.
The agency proved that only 3 companies out of 16, entering the market in Japan, are ready to be approved. They passed all the inspections while those who failed it lacked something to meet all the rules and expectations. Which companies are already ready to enter the market? They are Everybody’s Bitcoin, Lastroots, and Coincheck. These companies passed all the controls and are ready to work.
As for other 13 companies, the agency rejected one of them, and the other 12 have canceled their applications. Moreover, about 160 companies are planning to run their own cryptocurrencies.
Financial Services Agency expands the crypto team
Kiyotaka Sasaki, the Agency’s vice commissioner for policy coordination, during the meeting, noticed that biggest problem is to work with the new companies. He also added that their staff counts 30 people who monitor the crypto traders and exchanges. They also supervise the unregistered operators and review the applications for registration.
As 160 more companies are going to enter the market, the FSA requires much more staff. Otherwise, they will not be able to review all applications in time. For 2019, they have asked for 12 other specialists.
During the meeting, the participants discussed the self-regulatory rules. These rules are provided by Japan Virtual Currency Association. At the moment, the Association includes the following members: DMM Bitcoin, Xtheta, Money Partners, Bitarg Exchange Tokyo, Quoine, Bitpoint Japan, Tech Bureau, Bitflyer, Fisco Virtual Currency, Bitocean, Bitbank, SBI Virtual Currency, Bitgate, Bittrade, GMO Coin, and Btcbox.
Taizen Okuyama, the president of Money Partners and the association, explained all the regulatory rules to those who attended the meeting. One of the rules stated that to run the new currency, the company has first to inform the association in advance. If the association rejects the application, the cryptocurrency will not be available on the market. According to another rule, to measure the concerning margin trading, the regulator uses new strict rules.
The leverage limit set up by the association is 4. However, the member can set up their own limit depending on their needs and circumstances. The association explained that the margin trading rule tailors to “suppress the risk of loss of users and excessive speculative transactions in leverage transactions using virtual currency.”
At the same time, the exchanges must protect from money laundering, financial terrorism, and various anti-social forces. Also, these rules regulate the basic transactions, advertising, solicitation, dispute resolutions, trading guidelines and how to hold the ICOs. Despite the association’s plans to implement the rules very fast, some of them may require much longer to comply.