09 Sep 2018 Anthony Lehrman
Japan FSA Releases Strict Rules for Cryptocurrency Exchanges
The new regulations come into force under the auspices of the Payment Services Act, which was modified in April 2017 to protect cryptocurrency users.
Questions for the screening applications have already risen to 400. The new rules require applicants to provide and send records of their board meetings to check if enough discussions have taken place. Furthermore, applicants must present evidence for the effective and professional management of their company's financial health and for the exceptional level of security on their computer systems.
Due to the cyber theft in January, when 58 billion yen were stolen from clients' assets via Coindesk Inc., the agency had stopped its activities. Recently, the agency renewed its screening activities.
The FSA also conducts on-site inspections to confirm whether the answers given in the applications are accurate. Before the change in the Payment Services Act, the questions were related only to the financial status of the candidates and the security of their system.
Now the agency is interested in the extent to which company executives take part in the work process, and therefore it checks the records of board meetings.
Not only that, but shareholders are also inspected, and the internal system has to be in good working order. In August, the agency published the results of the cryptocurrency exchange applicants. There was a lack of board meetings and poor internal control.
At present more than 100 companies have wished to be registered in Japan. Toshihide Endo, the commissioner of FSA shared with Reuters that the agency‘s mission is to advance the crypto industry and allow it to grow with the correct regulation which can protect users in the best possible way.Cryptocurrency exchange Cryptocurrency Regulations Japan FSA Government