Japanese financial regulator considers stricter crypto rules
The Financial Services Agency (FSA), Japan’s official finance regulator, have started considering implementing stricter rules for crypto currencies in order to ensure better protection for Japanese investors and customers.
In July 2021, FSA had initiated a panel of financial experts in a dedicated department to help the Japanese government manage decentralized finance and all digital wallets. According to reports from Jiji Press, the same agency is set to be responsible for tracking developments in crypto currencies as well as maintaining a record of all digital currency transactions conducted via its central bank.
Japan’s new financial regulator’s team is slated to impose new crypto regulations from mid-2022. FSA is aiming for stability in the Japanese crypto market through the new regulations while encouraging innovation within the ecosystem.
Owing to the hack of Bitpoint, a Japanese crypto exchange that suffered a loss of $32 million, a 2019 law was revised by FSA. The new updates in the law mandate specific security procedures to be fulfilled by Japanese crypto users to ensure user safety in all digital exchanges and transactions.
Regarding the recent Liquid crypto exchange hack, FSA has expressed that the crypto operators in Japan need to implement adequate Anti-Money Laundering measures.
As a part of its improvised legal implications within the country’s crypto markets, FSA had announced in early August that Japan would soon adopt the Financial Action Task Force’s Travel Rule by the start of 2022, requiring all service providers of crypto services to share their transaction data. The Travel Rule was initially introduced in 2019 as a legal remedy against money laundering and terrorist financing in the crypto currencies network.