Japan Applies Stricter Registration Rules for Local Crypto Exchanges
May 10, 2018
Japan’s Financial Services Agency (FSA) has announced introducing stricter rules for registration of local crypto exchanges to prevent situations similar to that occurred with Coincheck in January this year. New regulations are reported to come into force this summer.
As the new document says, registering trading platforms will now consider the following five points:
- Exchange has to comply with strict system management standards. It has to use passwords in currency transfers and impose ban on storing crypto in online wallets;
- Exchange has to apply multi-factor identification to users performing large transfers;
- FSA has to be given full access to money saving of the exchange users. Clients’ assets will be managed independently from the exchange ones. In addition, platforms have to check account balance several times a day to avoid any outward drain;
- Exchanges have to enforce ban on operations with anonymous digital currencies like Monero and Zcash as they are used often for money laundering;
- FSA also demands more complicated internal rules for organizations. From now on exchanges have to separate shareholders’ assets from its own ones. What is more, exchange employees will have no chance to execute deals with the users’ assets.
Remember that Oki Matsumoto, CEO at online broker Monex, that is now the owner of Coincheck, has recognized tightening of crypto regulation inevitable as exchanges execute the same functions as banks: they store their clients’ funds and help in searching a match for a deal.