Japan’s top authority on financial regulation, the Financial Services Agency (FSA), has released documents on its fifth cryptocurrency fact finding mission held on September 12, 2018. While the crypto ecosystem was explored by the regulators many plans and ideas were discussed. The FSA addressed the need to add more personnel to review the 160 applicants who who want to enter the cryptocurrency market.
In the review process of cryptocurrency exchanges that are allowed to operate within the country, only three of the initial sixteen have been given permission to continue operations. As with most regulating bodies, the FSA will conduct on-site inspections. Currently, Coincheck, Lastroots, and Everybody’s Bitcoin are under oversight. For the other thirteen companies in the initial application phase, only one was denied permission to operate, while the others decided to withdraw from the process. Waiting to apply in the future are 160 companies wishing to enter the market as cryptocurrency exchanges.
With the large number of applicants waiting in the wings, Kiyotaka Sasaki, FSA’s vice commissioner for policy coordination, has requested an additional twelve employees to add to the current thirty to oversee the crypto traders, exchanges, and applications.
The FSA also explored the Japan Virtual Currency Exchange Association (Jvcea) of a self-regulated crypto ecosystem. President of the Jvcea, Yasunori Okuyama, addressed the attendees with the rules governing the proposed self-regulation:
When handling a new virtual currency, after conducting an internal review by the member, it is necessary to notify the association beforehand, and if the association gives an objection, it will not be handled.
The list of rules provided by Okuyama, are the standard rules that govern any financial market. Applicants will go through a review period, where they will be held to compliance of AML/KYC (anti-money laundering and know-your-client) and trading conditions using leverage and margin. They will also set the guidelines concerning launching an initial coin offering (ICO).
While self-regulation is on the table and the procedures of applications with the FSA , nothing has been decided as of yet.