Japanese Regulator Publishes Proposed Rules for Crypto Service Providers

2018-12-29 09:15

Japan’s top financial regulator has published the final report outlining proposed rules for cryptocurrency service providers to follow. The rules address areas such as hacking incidents, coin listings, financial and price disclosures, margin trading, and crypto custodial services.

Also read: Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations

Final Report of Proposed Rules

Japan’s Financial Services Agency (FSA) has published the final report from last week’s study group meeting on crypto exchanges detailing requirements “as a precondition of the proper principle of self-responsibility.” The agency expects crypto service providers to follow these rules either by themselves or under the guidance of a self-regulatory organization (SRO). Currently, only one SRO — the Japan Virtual Currency Exchange Association — has been approved by the FSA.

An FSA spokesperson told news.Bitcoin.com on Wednesday:

Based on the discussion of developing systematic approaches towards various issues on crypto-assets … Taking the perspectives indicated by the final report, FSA has been currently conducting comprehensive consideration on the future approaches, including for revising acts.

The requirements cover areas such as risks relating to thefts of customers’ cryptocurrencies when hacking incidents occur, price fluctuations and speculation. The lack of internal control systems amid rapid business expansion of service providers was discussed, along with measures for crypto transaction types such as margin trading that are not covered by existing regulations.

Rules on Crypto Exchange Operations

The report specifies nine areas that need to be addressed relating to the operations of crypto exchanges and service providers. The first proposed rule reads:

Where private keys of customers’ deposited virtual currency are managed online … service providers [are required] to maintain net assets and funds for reimbursement of the same or greater amount. The funds must consist of the same types as the deposited virtual currency.

Secondly, they must “Develop [a] framework to entitle customers to [a] statutory lien that secures their claim to deposited virtual currency.” They must also disclose their financial statements.

In order to ensure proper business operations, crypto service providers need to disclose information relating to trading prices, the report explains. They are also prohibited from advertising, promoting or encouraging speculative trading. Additionally, they must follow the rules set forth by an SRO. The agency noted that registration of non-SRO members that have not established internal rules equivalent to the SRO’s rules can be refused or canceled.

Furthermore, crypto service providers are prohibited “from dealing in virtual currencies that could impede user protection or proper and reliable business operations,” the report reads. The last requirement under this category is for them to notify the FSA “each change of a line of virtual currencies in advance.”

Rules on Margin Trading

The first proposed condition under this category states that a registration requirement for “foreign exchange margin trading (forex trading)” will be imposed on crypto service providers offering margin trading. The same code of conduct “such as the prohibition of unrequested solicitation” will also apply.

Secondly, a limit will be imposed on each cryptocurrency’s leverage ratio “based on [the] actual virtual currency price fluctuations.”

Service providers will also be required to explain the risks specific to cryptocurrencies and set minimum margin amounts. Lastly, crypto credit will follow similar rules as margin trading since they have similar functions and risks, the report details.

Additional Rules

The report also outlines rules for crypto custodial services and “unfair acts” in crypto spot trading. All persons and entities are prohibited “from improper conduct, spreading rumors and price manipulation.”

Cryptocurrency custodial services will be regulated going forward. Specifically, the same regulations that currently apply to crypto exchanges will apply to the custody of customers’ cryptocurrencies. Furthermore, the report notes:

Virtual currency exchange service providers [are] to monitor transactions and prohibit transactions aimed at profiting based on nonpublic information.

What do you think of these proposed rules? Let us know in the comments section below.

Images courtesy of Shutterstock.

Need to calculate your bitcoin holdings? Check our tools section.

The post Japanese Regulator Publishes Proposed Rules for Crypto Service Providers appeared first on Bitcoin News.

Similar to Notcoin - TapSwap on Solana Airdrops In 2024

origin »

Speed Mining Service (SMS) на Currencies.ru

$ 1.9622 (+0.00%)
Объем 24H $0
Изменеия 24h: 0.00 %, 7d: 0.00 %
Cегодня L: $1.9622 - H: $1.9622
Капитализация $205.406k Rank 99999
Цена в час новости $ 1.2835 (52.88%)

rules crypto proposed providers regulator service final

rules crypto → Результатов: 126


The SEC’s Recently Appointed Crypto Chief Wants to Finally Bring Order and Cooperation

The Securities and Exchange Commission has been grappling with the crypto industry as it strives to formulate rules for an industry that evolves faster than any other. While it’s yet to come up with a comprehensive set of rules, the commission is taking steps in that direction, and it’s appointed the first-ever senior adviser for […]

2018-8-2 23:00


Фото:

The Daily: Report Sees UK as Crypto Leader, Jersey Adopts ICO Rules

The United Kingdom has what it takes to become a true leader in the crypto space, according to a new report covered in today’s Bitcoin in Brief. Also in The Daily, the British Crown dependency of Jersey has adopted new requirements for ICO projects to better protect participating investors, Malta now has a two-way bitcoin […] The post The Daily: Report Sees UK as Crypto Leader, Jersey Adopts ICO Rules appeared first on Bitcoin News.

2018-7-18 14:25


Japanese Financial Institution Will Change Virtual Money Trading Rules

Japanese financial regulator the Financial Services Agency (FSA) is considering to change the legal basis for how it regulates cryptocurrency exchanges, local media Sankei reports July 3. The FSA reportedly is considering to regulate crypto exchanges by the Financial Instruments and Exchange Act (FIEA), instead of its current legal foundation, the Payment Services Act. Should

2018-7-3 09:06


Фото:

Philippines’ Financial Zone Making Crypto Controls, Authorizing 25 Exchanges

Regulation The authority of the Filipino government-owned economic zone is drafting regulations for cryptocurrencies and planning to limit the number of licenses it issues to 25. Japan Confirms Entrance Into the Crypto Space Drafting Crypto Regulations Philippines’ Cagayan Economic Zone Authority (CEZA) is “crafting rules to safeguard cryptocurrency investors,” according to the Philippine News Agency,

2018-7-1 22:11


Bank of England Deputy Governor Issues Warning to Financial Firms Over Crypto Risks

In a letter dated June 28, Sam Woods, deputy governor at the Bank of England who is also the CEO of the Prudential Regulation Authority (PRA), the UK’s financial watchdog, provided a reminder to financial firms of their “relevant obligations under PRA rules, and to communicate the PRA’s expectations regarding firms’ exposure to crypto-assets.

2018-6-30 18:29