FSA has declared first cryptocurrency exchanges that are now allowed to operate in the country under the recently adopted regulations.
The Japanese financial watchdog released a statement today which grants eleven companies a Virtual Currency Exchange license. For now, the list of the first authorized digital currency exchange firms includes Japan’s largest Bitcoin and blockchain company bitFlyer, Quoine, Tech Bureau, Bit Bank, SBI Virtual Currencies and GMO Coin with the Financial Services Agency saying its investigation of the applicants still goes on.
bitFlyer was founded three years ago and soon offered the public its virtual currency exchange services. Rapid growth of the virtual currency market provided the company a chance for steady development and bitFlyer hasn’t missed it out growing to over 800,000 users and a monthly trading volume of over 1.5 trillion yen and becoming the company with the largest monthly transaction volume, number of customers, and capital in Japan. Moreover, in February it became known that there local megabanks – Mizuho Capital, SMBC Venture Capital and Dai-ichi Life Insurance Company – invested ¥200 million ($1.75 million) in the Japan’s leading bitcoin exchange.
Last month bitFlyer made public its plans to launch US-based subsidiary – Bitcoin exchange bitFlyer USA, Inc by the Fall of 2017 with the new office based in the financial district of San Francisco. It has already gained regulatory approval to operate in 34 states, which is a significant move given the complicated nature of the U.S. regulatory landscape, where supervisory authorities in each state have their own licensing and oversight modes. But still the company’s founders do admit the importance of receiving the FSA approval in Japan.
“Japan has been exploding with demand for both bitcoin trading as well as virtual currency services,” bitFlyer said in a statement. “The FSA’s approval for bitFlyer to operate as a Registered Virtual Currency Exchange, and the agency’s openness and forward thinking regulation could not come at a better time for the Blockchain space.”
Mike Kayamori, CEO and co-founder of Quoine, said in a separate statement that “as the first global crypto fintech company to be fully licensed with the JFSA, we will keep on working hand in hand with regulators and other stakeholders towards the healthy development of the cryptocurrency industry within Japan and on a global scale.”
“Protection of customers’ assets is of the highest priority to us,” he assured. “With our JFSA license, this is a positive market signal that we are here to build a trusted exchange, with proper compliance measures in place to prevent security breaches and provide more asset protection for our customers.”
bitFlyer, Quoine and nine other digital currency exchange companies will have to follow and comply with some requirements, including creating a strong and secure computer system which would segregate customer accounts and authorize customers’ indentity what would prevent the exchangers from money laundering.
Earlier this month Japan authorities announced its plans to monitor virtual currency exchanges operating in the country. The decision of the Japanese authorities was dictated by the growing number of crimes such as fraud and money laundering caused by innovative services thanks to their low settlement and remittance costs. During the first seven months of the current year there’ve been recorded over 30 cryptocurrency-based frauds representing more than a half of million dollars-worth of loses, reported in the first seven months of 2017.
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