The amendments to the Payment Services Act (PSA) and the Financial Instruments and Exchange Act (FIEA) that change the regulatory framework for cryptocurrency in Japan went into effect from today. The amendments were proposed by the country’s top financial regulator, the Financial Services Agency (FSA), and were adopted on May 31, 2019. Currently, Japan has 23 regulated crypto exchanges, and all the unregulated exchanges have changed their terms for Japanese users, and some even banned Japanese users from their platforms.
New regulations would affect all crypto businesses in Japan.
International law firm Morrison & Foerster described the new regulations saying, that the rules coming into effect represent an essential change in the way the FSA will regulate crypto business activities of operators in Japan from now. The new regulations also concern crypto custody service providers that do not sell, purchase, or intermediate the sale and purchase of cryptocurrencies and crypto derivatives businesses. Under the new laws, crypto derivatives businesses must register under the FIEA. However, a crypto derivatives business that also provides crypto custody service might need to register as a crypto exchange.
BitMEX bans Japanese users from registering.
Earlier this week, crypto exchange BitMEX announced to ban Japanese users from registering on the platform. The exchange further revealed that existing Japanese users on the exchange would not be able to place orders that would open a new position or increase an existing open position. BitMEX took such a step in response to new crypto regulations that are going into effect from today. The crypto exchange in its blog also revealed that it would continue to work with Japanese regulatory authorities to bring back Japanese users on its platform.
Currently, Japan has 23 FSA-approved crypto exchanges, and non-regulated exchanges are being forced to shut down in the country. Unlicensed crypto trading platforms are forced to modify their terms of service to exclude Japanese users in order to comply with the new regulations.
How will the regulations impact the price of bitcoin is yet to be seen.