Japan Financial Services Agency will change the regulations for cryptocurrency exchanges

The Financial Services Agency (FSA) is considering changing the legal basis for its cryptocurrency trading regulations, and the FSA is considering managing cryptocurrency transactions through the Financial Instruments and Transactions Act (FIEA) rather than relying on current payment service laws, which means exchanges Will face more strong customer protection, cryptocurrency will be treated as a financial product rather than the same payment method as electronic money.

According to local media Sankei reported on July 3, the Financial Regulatory Agency Financial Services Agency (FSA) is considering changing the legal basis for its cryptocurrency trading regulations.

According to reports, the FSA is considering managing cryptocurrency transactions through the Financial Instruments and Transactions Act (FIEA) rather than relying on current payment service laws. According to Senkai, this means that the exchange will face stronger customer protection. FIEA requires securities companies to manage company assets separately from client funds and securities such as stocks.

According to current law, cryptocurrency is legally defined as the same payment method as electronic money. If the FSA begins to use the FEIA specification to encrypt currency transactions, the cryptocurrency will be treated as a financial product. FIEA also has the possibility of introducing cryptocurrency derivatives such as exchange-traded funds (ETFs).

Sankei reported that earlier this year, Coincheck’s 523 million NEM hacking incident allowed FSA to consider the different legal foundations of cryptocurrency transactions. Since then, the FSA has investigated 15 unregistered exchanges and found various security and regulatory deficiencies in the exchange’s business operations.

Earlier this month, the Virtual Money Trading Association (JVCEA) announced a new set of principles of self-discipline. Self-regulatory trading institutions aim to better align with existing anti-money laundering (AML) regulations and prohibit trading anonymous cryptocurrencies such as Monero and Zcash.

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