According to local media Sankei, Japan’s financial regulator, the financial services Agency (FSA) is considering changes to the regulation of cryptocurrencies.
It is reported that the FSA is considering the possibility of regulation of cryptocurrency in accordance with the Law on the financial instruments and exchange (FIEA) instead of the current grounds of the Act on payment services. According to Sankei, this means that cryptocurrency exchanges will have to change the mechanism of protection of clients ‘ funds. FIEA requires companies operating in securities, to store and to manage the funds and securities of customers, such as shares, apart from corporate assets.
Under current law, cryptocurrencies are legally the means of payment such as electronic money. If the FSA starts to regulate cryptocurrency exchanges and exchangers within FEIA, cryptocurrencies will be treated as a financial product. FIEA will also open the possibility of introducing derivatives of cryptocurrencies such as exchange traded funds (ETF).
Sankei says that the hacking Coincheck at the beginning of this year, which resulted in the attackers managed to kidnap 523 million dollars, influenced the decision of the FSA to consider different frameworks for the regulation of cryptocurrencies. After hacking the FSA started checks on 15 of cryptocurrency exchanges and exchange offices, where he found many shortcomings in the field of security and regulation.
Earlier this month, the Association of exchanges of virtual currency (JVCEA) announced the introduction of the new rules. The new rules should help to improve standards to combat money laundering, as well as introduced a ban on anonymous digital currencies like Monero and zcash for.