The Financial Services Agency (FSA), Japan’s premier financial regulator, is on a mission to tighten the registration screening process for cryptocurrency exchanges.
The Japanese government is no doubt a pioneer in the cryptocurrency space. Its constant efforts to introduce bitcoin and other cryptocurrencies in general to the masses are exemplary, but it also prioritises the protection of individuals, particularly from unscrupulous crypto exchanges.
According to a report on one of the country’s local media outlets, The Japan Times, on September 2, the FSA upgraded and revised the registration process. The Payment Service Act (used to determine whether crypto exchanges are following due process in terms of conducting risk management), which has been in use since April 2017 was particularly subject to scrutiny.
The financial watchdog added new features to the act’s legislation, including additional screening questions, and the requirement that exchanges submit their board meeting records and shareholder composition. This is to ensure that future regulated exchanges are of sound financial health and not linked to any suspicious anti-social activity. They will also be checking to ensure that the company’s computer security is at its optimum.
Coinbase in Japan?
However, as a result, the FSA will most likely be open to accepting new applications for potential crypto exchanges once more. This will create a new lifeline for some notable exchanges like the American-based Coinbase that showed interest in the Japanese market earlier in June this year.
This move comes just a few weeks after the FSA released results reflecting its on-site crypto exchange inspections. The report suggested the agency was in plans to monitor more closely on the business models of newly registered crypto exchanges.