Japan Financial Services Agency (FSA) has presented a proposal that would considerably tighten cryptography regulations.
A Tuesday FSA report recommends regulating cryptocurrencies under the Financial Instruments and Exchange Act (FIEA), by passing them under the Payment Services Act. This aims to strengthen the protection of investors and align the surveillance of cryptography with the securities regulations.
The regulator has declared that many problems within the crypto resemble those traditionally discussed within the framework of the FIEA, it can therefore be appropriate to apply similar mechanisms and application.
The main problems of crypto investment highlighted in the report include little clear white bods, inaccurate disclosure, unregistered operations, investment scams, low -risk tolerances and security problems in exchanges.
An approximate translation of the report said:
“It can therefore be appropriate to resolve them (cryptographic assets) using the mechanisms and the application of the law on financial instruments and exchange.”
The report is not legally binding; This is an internal information document prepared by the FSA secretariat to present ideas to the Financial System Council. The Council is an official advisory body of the Minister of Financial Services of Japan, and the government will then decide whether new rules are necessary.
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Crypto is increasing in Japan
The report notes that the crypto plays an increasingly important role in the economy of Japan, the total number of accounts open to the exchange of interior cryptocurrency exceeding 12 million and the balance of user deposits reaching more than 5 yen billions (33.7 billion dollars). This is almost equivalent to an crypto exchange account for 10 people.
However, he stressed that small -scale trading is dominant in Japan, with more than 80% of the individual accounts with less than $ 675.
The FSA also noted that 7.3% of people with investment experience have a crypto, more than those who negotiate the FX or have corporate obligations. About 70% of Japanese crypto holders are intermediate income employees and 86% of users negotiate with the expectation of long -term prices.
The FSA report follows the recent recognition of the Minister of Finance of Japan Katsunobu Kato Kato according to which cryptocurrencies deserve a place in diversified investment portfolios. “While cryptographic assets include the risk of high volatility, by establishing an appropriate investment environment, they can become a diverse investment option,” he said in late August.
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Stricter rules for crypto
As part of the FIEA, the crypto is already treated as a financial instrument when used as an underlying asset for derivatives.
The application of the law on financial instruments and the exchange would require the requirements of disclosure to the cryptographic issuers of securities concerning public offers and secondary distributions. This said FSA, “would eliminate the information asymmetry between issuers and investors”.
The rules of the FIEA would also regulate intermediation and brokerage houses for purchase and sale. They would also apply the rules against unfair exchanges and provide implementing measures, including emergency injunctions against unregistered companies.
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