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Japanese Financial Services Agency is discussing to impose stricter Crypto Laws

Aug 26, 2021

The aim is to begin the use of new rules by mid-2022. Financial Services Agency (FSA) of Japan has begun taking steps towards strengthening cryptocurrency regulation, aiming to provide better protection to the local investors.

Due to local media outlet ‘Jiji Press’ report, debates on the new crypto laws are already initiated by Japanese authorities. It is planned to develop risky digital asset regulation by summer-2022. The work on the new legislation is motivated by FSA will to stabilize digital currency industry without interfering crypto-projects development.

Last month, Financial Services Agency formed a dedicated section and a panel of experts in order to regulate the growing and complex finance sector. This shall be considered as FSA’s efforts to track cryptocurrency developments. Japan has always been considered as a pioneer in cryptocurrency adoption and legislation development, as some of the first crypto-exchanges were established here and led the market in Bitcoin trading for some years already.

Hacks Led to Strict Rules

After the massive attack on the Japanese leading crypto exchange, Coincheck, which resulted in theft of over $500 million worth of digital currencies, took place in 2019, major overhaul of Japanese crypto regulations took place. In order to strengthen security of exchange and protect investors from such attacks, the Financial Service Agency strictly mandated the registration of all crypto trading platform operating in the country. Despite the security requirements, the Japanese crypto exchange, Liquid was hacked recently when hackers stole around $80 million in cryptocurrency. The FSA has developed rules around the storage of client assets by the exchanges and is now bending towards adopting the Financial Action Task Force’s Travel Rule by 2022 that will mandate all crypto platforms to gather transaction data, ending anonymity in crypto.

This is not the first time this year, that Japan makes statements on cryptocurrency restriction. Furthermore, it is clear that a world-wide trend is settling, since many other countries from all over the globe, for example Estonia and South Africa, are moving in the very same direction and pay attention to digital currency jurisdiction.

Our editorial office evaluates those changes positively, as it not only prevents crypto-fraud acts, but also shows that cryptocurrency market continues its majestic gait all over the globe.

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