Japan's Financial Authority Is About to Start Bitcoin Exchange Surveillance
To make sure that Bitcoin exchanges that are operating from Japan are complying with the recent legalization of Bitcoin as one of the valid payment methods since April, the Financial Services Agency (FSA) of Japan has stated that as of October 2017, it will do a complete review of the exchanges and put them under surveillance.
The law of payment services was revised and put into motion in April. This meant that Bitcoin officially became a legal payment method thus every Bitcoin exchange that operates in Japan has to register their companies at the authorities by 30th September.
Should no problems be discovered by the agency in the initial examination, exchanges will then continue on to the next part of the registration which includes a complete review to make sure that they completely comply with the new law. Reportedly, FSA officials stated that the ‘full surveillance’ will commence in October. The Japan Times stated that the FSA might monitor if the exchanges for Bitcoin and some other digital currencies have proper internal systems. The agency may also conduct on-site inspection if it seems necessary.
The FSA, in August, formed an experienced team of thirty officials from the local and bureau of finance to be used for comprehensive surveillance. The Japan Times added that the team is inspecting if virtual currency exchanges are able to manage the assets of customers separately from their individual assets and if they have any proper risk management measures; including the best way to react to cyber-attacks.
Quoted by Nikkei, the FSA also said they might try hard to balance the development and monitoring of the quickly expanding virtual currency market, including responding to Initial Coin Offerings that is known to raise funds through the virtual currency’s mechanism.
Bitcoin exchanges, such as Coincheck have already been awarded registration and in August alone, news.Bitcoin.com claims that Japan’s Financial Services Agency had gotten approximately fifty applications by companies who would like to start Bitcoin exchanges in Japan.
As the FSA continues with its review and surveillance of companies and Bitcoin exchanges, 5 of the smaller companies that wanted to register have since taken back their applications and will be leaving the business of being a Bitcoin exchange altogether because of “not meeting the essential conditions” as reported by the NHK.
Nifty News, on the other hand, claimed that the FSA was preparing to reveal the names of the organizations that finished and passed the preliminary registration by the 30th of September.