As reported, Japanese financial regulator FSA will change the legal foundation for crypto exchanges.
The Financial Services Agency (FSA) are considering changing the legal basis of how it regulates the exchange of criptodivisas, informs the media Sankei on July 3.
Apparently, the FSA is considering the possibility of regular exchanges of crypto by the Financial Instruments and Exchange Act (FIEA), instead of its current legal basis, the Payment Services Act. According to Sankei, this means that the exchanges have a greater security for the customer. The FIEA forces security companies to raise the funds and securities of customers, such as stocks, separately from corporate assets.
According to the current legislation, the crypto currencies are made legally as the same means of payment as electronic money. If the FSA starts to regulate trade under the FEIA, crypto will be treated as a financial product. The FIEA have also opened up the possibility of introducing derivatives of encryption as the exchange-traded funds (ETF).
Sankei writes that the NEM hack of 523 million at Coincheck at the beginning of this year has contributed to the FSA considering a different legal basis for exchanges in the field of encryption. After the hacking, the FSA launched an investigation into 15 unregistered exchanges, where it found series of deficiencies in safety regulation of the business operations of the exchanges.
At the beginning of this month, the Virtual Currency Exchange Association (JVCEA) announced a new series of voluntary rules. The self-regulatory exchange body tries to align better with the existing regulations in anti-money laundering (AML), and also to prohibit the trade of crypto currencies based on anonymity like Monero and Zcash.