Japan to Change How It Regulates Crypto

  • Coincheck hack spurs decision for tighter laws
  • Japan’s crypto exchanges could be governed by Financial Instruments and Exchange Act
  • Law changes will enhance user protections 

The Japanese Financial Services Agency (FSA) is considering changes to the way it regulates cryptocurrency exchanges.

The amendments will mean crypto exchanges will be regulated by the Financial Instruments and Exchange Act (FIEA), instead of the current legal framework, the Payment Services Act. The FIEA obliges securities companies to manage customer funds and securities, such as stocks, separately from corporate assets.

Under the current legislation, cryptocurrencies are legally positioned as the same means of payment as electronic money. Should the FSA start regulating exchanges under the FEIA, crypto will be treated as a financial product. The FIEA move will also open up the possibility of introducing crypto derivatives.

The proposed changes will reportedly enhance user protection and the catalyst for the decision is the need to strengthen the legal framework for exchanges following the 523m NEM hack at Coincheck early this year. Following the hack, the FSA launched investigations into 15 unregistered exchanges, where it found various security and regulatory shortcomings in operations.

Earlier this month, The Japan Virtual Currency Exchange Association, an industry organization established in April, announced a new set of rules prohibiting the handling of anonymous virtual currency and proposed voluntary regulations based on the protection of customer assets.

President Trump Wanted to 'Go After Bitcoin' in 2018, John Bolton Reveals

Michael LaVere
  • Former national security advisor John Bolton's claims that President Donald Trump wanted to "go after bitcoin" in May 2018. 
  • Bolton's new book details a tense exchange between President Trump and Treasury Secretary Steven Mnuchin over cracking down on crypto-assets.

Former national security advisor John Bolton said that President Donald Trump wanted to “go after bitcoin” in 2018. 

According to a report by the Washington Examiner, which received an advanced copy of Bolton’s tell-all book The Room Where it Happened,  President Trump wanted to crack down on bitcoin and cryptoassets in 2018. 

The book claims that President Trump told Treasury Secretary Steven Mnuchin to put pressure on the trading and selling of bitcoin. 

The report reads, 

Don't be a trade negotiator," Trump allegedly said, as was written in The Room Where It Happened, a copy of which was provided to the Washington Examiner. "Go after Bitcoin [for fraud].

According to Bolton, the exchange took place in May 2018 amidst a tense discussion over trade sanctions and tariffs placed on China. 

The report also notes the Trump administration’s history of skepticism towards cryptocurrencies, culminating in the release of new guidelines for the trading of crypto-assets earlier this year. 

Mnuchin said in a statement made in February, 

We want to make sure that technology moves forward, but on the other hand, we want to make sure that cryptocurrencies aren't used for the equivalent of old Swiss secret number bank accounts.

Featured image by Library of Congress on Unsplash