Japan Hopes to Set Global Crypto Law Benchmark With Latest Regulatory Update

Most Japanese crypto exchanges have welcomed the changes, since they expect more institutional investors to join the crypto industry.

From April 2020 onward, crypto exchanges operating in Japan will have to manage users' money separately from their own cash flows.

If the exchanges manage users' stored cryptocurrencies in other ways, such as a hot wallet system, they have to hold "The same kind and the same quantities of crypto assets" as the users' crypto assets.

The agency dubbed the anonymous coins as "Problematic crypto assets." However, inclusion of anonymous coins in the bill eased the speculations regarding whether the FSA is indeed planning to regulate this area of the crypto sphere.

From April 2020 onward, crypto asset derivatives transactions will be regulated under the FIEA. The law doesn't specify margin rates, although the Japan Virtual Currency Exchange Association, a major self-regulatory organization in Japan, has a guideline that proposes to restrict margin rates by four times or even lower.

Data from the Japan Virtual Currency Exchange Association shows that the volume of leveraged, margin and futures trading for crypto was far higher than that of spot trading in Japan from April 2017 to March 2018.Prohibitions.

The FIEA prohibits anyone from engaging in activities such as dissemination of rumors, usage of fraudulent means for purposes of selling or purchasing or engagement in any transaction in respect to crypto assets or for purposes of engagement in any crypto asset derivative transactions and the likes.

Most Japanese crypto exchanges that Cointelegraph Japan contacted have spoken positively about the new laws.

BitPoint also expects more institutional investors to join the crypto movement and the market to expand further as crypto rules become clearer.

After attempting to get ahead with crypto regulation, Japan witnessed two major hacks in 2018.