Japan’s FSA tightens cryptocurrency exchanges monitoring, Bitcoin and other cryptos go down

Global regulators continue to tighten screws on cryptocurrency exchanges activities to prevent illegal operations and ensure proper risk management. To that effect, Japanese financial markets watchdog - the Financial Services Agency (FSA) has tightened control over registration procedures on digital assets trading platforms. The process is regulated by the revised Payment Services Act, effective since April 2017. 

The Agency increased the number of questions to be answered in the applications to about 400 items, the Japan Times writes, citing the undisclosed sources. Previously, the questions covered only such aspects as an applicant’s financial status and measures to ensure system safety.

Apart from that the companies shall submit the minutes of board minutes so that the regulator can decide whether the executives devote enough time and focus to the company’s financial health and the security of its computer systems.

"The upgraded screening process also regularly reviews the composition of an applicant company’s shareholders, while examining if an internal system is in place to check for links to antisocial groups", the Japanese media outlet writes.

The new measures have followed the on-site inspections that revealed many deficiencies in internal controls at cryptocurrency exchanges.

While the clear regulatory approach and proper investor protection is beneficial to the cryptocurrency market, the short-term reaction tends to be negative as these measures imply more restrictions and limitations both to the trading platforms and investors. 

Bitcoin is trading at $7,200, down over 1% since the start of the day. ETH drops below $290, losing $2.5%, while XRP slips to $0.3360.