On a local media report by Sankei in July 3, Japan’s Financial Services Agency (FSA) is now planning to change the country’s crypto exchange regulations.
The changes revolve around the Financial Instruments and Exchange Act (FIEA), and the Payment Service Act. The changes will focus more on stronger customer protection. The FIEA obliges security companies to manage securities and customer funds separately from corporate assets.
Currently under the legislations, cryptocurrencies are the same as electronic money. If changes will take place according to FSA new regulations, cryptocurrencies will now be treated as a financial product. The FSA will possibly introduce a crypto derivative such as an Exchange Trade Fund (ETF).
The report says that earlier this year there have been $523 million NEM hacks at Coincheck. This has contributed to FSA considering to making some changes in the current regulatory. In the hack, it shows some regulatory and security shortcomings. The investigation shows that there were 15 unregistered exchanges. The new regulation will lessen the chance of damage to customers.
The Virtual Currency Exchange Association (VCEA) earlier this month announced a new set of voluntary rules. The association’s goal is to better align with existing Anti Money Laundering (AML) regulations, this will also not allow anonymous-based cryptocurrencies like Zcash and Monero.