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Hiroyuki Mihara, COO of leading Japanese crypto exchange Bitbank, says that upcoming crypto regulations will help the industry develop next year.
At the Asia Digital Asset Exchange 2020 seminar held in Seoul, Mihara said, in a statement translated by Decrypt, “Last May, the Japanese government officially approved changes to the Act on Settlement of Funds and the Financial Instruments and Exchange Act regarding crypto and they will be activated in April 2020.”
The Japanese government has already passed a bill to make changes to existing financial regulatory frameworks to better regulate the cryptocurrency sector in May and local financial authorities have only allowed licensed cryptocurrency exchanges to operate in the local market.
He said that, as the government moves towards providing clarification on specific areas of the cryptocurrency exchange market, it will establish a safer environment for investors in Japan.
“Currently, cryptocurrency exchanges in Japan can only provide crypto-related services after obtaining a formal license from the Japanese Financial Services Agency. A specific regulatory framework for Contract for difference (CFD) will also be released. A more secure trading environment for local investors will be created,” Mihara stated.
Previously in August, in an interview with local publications in South Korea, Mihara said the Japanese government moved to introduce stricter policies following the high profile Coincheck security breach in January 2019. At the time, the exchange lost more than $400 million worth of cryptocurrencies, most of it in NEM.
The licensing program for cryptocurrency exchanges was introduced after the Coincheck incident occurred, since the Japanese government decided that the industry will have to be strictly overseen to prevent major security-related issues.
Bitbank along with 20 other cryptocurrency exchanges were first licensed by the FSA in September 2017. Prior to that, major crypto markets in Asia including Japan and South Korea had taken a hands-off approach. Many governments stayed away from formally regulating the cryptocurrency exchange market out of concerns that the public may consider it as an endorsement of the space.