Japan to Begin Surveillance of Bitcoin Exchanges Next Month

Japan to Begin Surveillance of Bitcoin Exchanges Next Month. Over the last couple of weeks, there have been some reports that indicate that Japan’s government will be taking a more active role in the digital currency market. Yesterday, a confirmation of those reports came from the government officials. Japan’s Financial Service Agency or FSA has published a statement in which they have announced that they will be starting with the complete review of all Bitcoin exchanges operating in the country.

That means that FSA will be implementing the full surveillance of Bitcoin exchanges and the agency announced that they will start their operation on October 1, 2017. Back in April, Japan recognized Bitcoin as a legal method of payment and because of that, the government has announced that they will be taking a more active role in transactions involving Bitcoins. Back at that time, the new regulation obliged all Bitcoin exchanges to be registered with authorities, otherwise they would not be allowed to operate on the territory of Japan.

All Exchanges Coming under Scrutiny

The Financial Service Agency has announced that they will verify all Bitcoin exchanges and only those exchanges will be allowed to continue with the process of registration that will get a positive review. As a result they will become officially recognized by the government. The Japan Times has published that FSA will be monitoring all exchanges and whether or not they have the required internal systems, most importantly, those that provide the security of the assets that the client is bringing to the exchange.

Since the government recognized Bitcoin as the official method of payment, the demand for this digital currency has been growing steadily. More and more merchants and other market participants adopt the new method of payment and it has been reported that already 50 companies applied for the permission to operate a Bitcoin exchange. Some of those companies such as Coincheck have already announced that they received the permission to start the business.

Government Enacting Strict Criteria

On the other hand, five smaller companies had to withdraw their applications because they were not able to meet the requirements set forth by the Japanese government and financial authorities in the country. According to some reports, these five companies will be exiting the Bitcoin exchange business for good as they do not qualify for obtaining the operation permit.

According to the source from the FSA, this agency is planning to publish the list of those companies that have successfully gone through the process of registration and that will be allowed to continue with their operation. As the same sources disclosed, those names will be published at the end of September, so it will become public in the next couple of days. Apart from Bitcoin exchanges regulation, the Financial Service Agency will also be dealing with Initial Coin Offerings. This method of fundraising has become very popular in the last couple of months when it comes to collecting funds to start or expand a company business.

Written by Ivan Potocki