According to local media reports, the chief financial regulator of Japan have significantly complicated the process of reviewing applications for the licensing of cryptocurrency exchanges.
The financial services Agency of Japan (FSA), the chief financial regulator of the country, “increased the number of questions which must be answered for the operators of exchanges, about 400 points”, which is four times higher than previous standards, reported the Japan Times on Sunday.
The revision of the Law on payment services Japan officially recognize the cryptocurrency as a legitimate method of payment in April 2017. According to the law, the internal operators of cryptocurrency exchanges are also required to enroll in FSA for obtaining a license from the regulator.
“After the Law on payment services, as amended, entered into force on 1 April 2017, only business operators registered with the competent local Finance Bureau, allow you to manage exchange of digital currency”, — stated in the official manual of the FSA last year.
Now the regulator also ordered the claimants to provide detailed records (minutes) of formal meetings of the Board of Directors to assess whether enough attention is paid to the security of the assets of its customers and its own internal cyber security along with its financial stability.
Then the FSA will conduct inspections in offices operators of stock exchanges, claiming the license to verify the accuracy of the answers provided in the selection process, the report said.
While the previous survey blank 100 points was mainly focused on system security and the financial condition of the applicant, the Agency is now beginning to examine the records of the meetings of the Board of Directors, and verifies that “the shareholders of the applicant company,” — said in the report.
Citing sources, the Japan Times also says that the Agency will review the effectiveness of internal systems of the exchanges set to “verification of relationships with antisocial groups”.
FSA seriously toughened control on the work of cryptocurrency exchanges after the attack
to the exchange Coincheck in January of this year, which was stolen cryptocurrency for $530 million. In June, the regulator ordered
six licensed exchanges to amend their work. These orders followed an inspection at offices of the companies to verify compliance of all necessary measures to combat money-laundering and supporting a high level of security of clients ‘ assets.
As previously reported, the FSA also intends
to review the existing legislation on the regulation of cryptocurrencies, to limit their use as investment. FSA seeks to engage the sector exchange of cryptocurrencies under the scope of the Law on the financial instruments and exchange (FIEA) and applying to it rules, which fall under a traditional company engaged in transactions with securities and stock brokers.
The tightening of process of licensing of exchanges is causing some issues and at odds with the recent statement of the new head of the FSA of Japan, which made
against “excessive” regulation of cryptocurrency exchanges.