In the absence of regulatory standards and legal guidelines, cryptocurrency exchanges increasingly face scrutiny from regulatory bodies around the world. While the biggest exchanges have the financial capacity to shift their country of operation, the smaller ones shut shop abruptly, or begin their process of wrapping up their business in a legal manner.
Another Eight Bite The Dust
According to reports, eight cryptocurrency exchanges in Japan have requested a withdrawal of their cryptocurrency operations. However, due to Japan’s Revised Fund Settlement law, the exchanges in question are legally allowed to continue operations, regardless of the application’s review status.
In the last week of April 2018, Japan’s Financial Service Agency (FSA), put together a ‘study-group’ to ideate standards and set guidelines for the functioning of cryptocurrency exchanges in the country.
The study group includes the who’s who of the Japanese regulatory department, including representatives from the bank of Japan, the Consumers Affairs Agency, Ministry of Justice, and the Ministry of Finance came together, along with Taizen Okuyama of Money Partners.
The withdrawal request for operating licenses can be attributed to the firms possibly fearing in anticipation of what the guidelines might entail.
According to the FSA:
“Eight deemed virtual currency exchange companies announce the intention to withdrawregistration application. One company confirms that it does not fall under the virtual currency exchange industry as a result of grasping the actual situation in detail.”
However, the FSA confirmed that more than a 100 companies are willing to enter the cryptocurrency exchange market, by relevant laws and regulations.
Inevitable Regulations to Soon be Introduced
The agency is also making sure that all the norms set by them are met and hence, have started handing out administrative penalties. Around fourteen orders have been issued till now, in which, five crypto exchanges were subjected to business suspension while seven received business improvement orders. Companies like FSHO and Coincheck received two orders.
Cyberagent, the operator of Abema TV and various online advertising businesses, is one of the hundred companies that are willing to enter the crypto space, in the form of a subsidiary called Cyberagent Bitcoin.
Owning to the Coincheck hack, CEO Susumu Fujita says there are high risks involved which the company does not want to undertake, thus delaying its entry in the market. He adds:
“Entry [into the crypto space] is slow in the first place. The examination by the Financial Services Agency is becoming severe.”