Japan’s Financial Services Agency Changes Rules on Trading Platforms

The Financial Services Agency (FSA), which is the Japanese financial regulator, is considering changing the regulation of cryptocurrency trading platforms, reports the Japanese daily  Sankei today.

The FSA would consider regulating cryptocurrency trading platforms by applying the Financial Instruments and Exchange Act (FIEA). This application would replace the current regulation that defines trading platforms as “payment services”. This means that trading platforms will have to offer better protection to their customers. The FIEA requires securities companies to manage the funds and securities of clients separately from the assets of the company.

Current regulations place cryptocurrencies in the same category as electronic means of payment. If the FSA applies this regulation (FEIA) to trading platforms, cryptocurrencies will be considered financial products.

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According to the local newspaper, the recent flight of 523 million NEM on the Coincheck platform has contributed to the government’s decision to change the regulation on cryptocurrency trading platforms. The financial security agency conducted a survey of about 15 unregistered platforms and concluded that security and regulatory deficiencies were present at these sites.

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