- Waiting for news from Japan
- The FSA’s plans for 2022
- Regulators are looking at the growing cryptocurrency market
At the end of summer, regulatory agencies around the world have started circling the cryptocurrency market again. The crypto community has been expecting tighter regulations for several years, but the traditional financial system has been reluctant to embrace new technology.
The Japanese Financial Services Agency (FSA) is planning to establish new cryptocurrency regulations. By making them significantly tighter, the regulatory agency intends to provide financial security to Japanese investors.
The FSA is currently considered to be one of the most active financial regulators in the world. It even dedicated an entire section of its operations and invited a panel of experts to study cryptocurrencies and the new financial market. Leading economists are helping to develop new cryptocurrency regulations.
Japanese media outlet Jiji Press has published an article, reporting that the FSA intends to develop tight cryptocurrency regulations and implement them by next year. The FSA wants to provide stability of the cryptocurrency market while also ensuring that it doesn’t impede the developments in the cryptocurrency sector: the new regulations are not supposed to hinder any innovations.
The contents of the new regulations have not been revealed, but they might mean that cryptos will not be anonymous anymore, with each owner having to reveal their identity. The new rules will clearly intend to ensure the security of cryptocurrency exchanges and wallets. In recent years, cryptocurrency owners have lost billions of dollars as a result of hacks. For example, a Japanese cryptocurrency exchange Liquid was recently hacked, and the losses amounted to about $90 mln.
As of today, the cryptocurrency market is worth more than $2 trillion. This attracts the attention of regulators from all over the world: the United States SEC, the UK’s FCA, Australia’s ASIC and others are planning to join their forces and establish basic cryptocurrency market regulations.
The main policies are still KYC (Know Your Customer) and AML (Anti-Money Laundering). The former was introduced in 2016, while the latter is much older: regulators had been fighting against money laundering long before the invention of cryptocurrencies.
So far, regulators are mostly interested in cryptocurrency exchanges. For example, a leading crypto exchange Binance has already been warned in some countries for operating without a license. The regulations make a significant impact on the attitude of users toward cryptocurrencies, with the authorities trying to take away one of the main advantages of cryptos — their anonymity. And although regulatory agencies attribute their interest primarily to ensuring security, the latest news raise certain doubts and may indicate that governments are mostly concerned about the loss of taxes.