Japan’s interminable winter for cryptocurrency exchanges seems to have thawed.
The Financial Services Agency (FSA), Japan’s top financial watchdog, told crypto news site Bitcoin.com that 110 exchanges are in “various stages of registration.”
In 2018, the FSA, did not grant approval for any crypto exchanges to begin operating in the country. The year prior, the agency had approved 16 new exchanges.
Additionally, in 2018 the FSA began issuing “improvement orders” to preempt potential cases of fraud or KYC noncompliance and started conducting on-site inspections.
“BitFlyer, amongst other top exchanges in Japan, received the improvement order based on a changing regulatory climate in Japan,” a bitFlyer representative said. The company voluntarily stopped opening domestic customer accounts for those looking to join the platform, as it worked to meet the FSA’s stricter identification requirements.
Now it appears the climate is changing again.
On July 3, bitFlyer announced it would resume processing new accounts. Additionally, according to Bitcoin.com, in the first six months of 2019, the FSA has granted approval to 3 additional crypto exchanges, bringing the total amount of operators to 19.
While details for the majority of applications for new crypto exchanges are scant, Bitcoin.com reports many are in a preliminary stage.
If approved, these exchanges will need to comply with newly introduced obligations in the Payments Services Act and Financial Instruments and Exchange Act, enacted by the Japanese legislature on March 31 to take effect in April, 2020.
The acts introduce expensive licensing fees as well as extensive protocols for data protection, customer on-boarding, and custodial safeguarding.
FSA image via Shutterstock