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Norway Introduces New Rules for Crypto Service Providers

Norway’s financial regulator has announced new regulations specifically aimed at cryptocurrency providers which will take effect on October 15.

The Norwegian Financial Supervisory Authority (FSA) is enforcing the regulations as part of a government push to ensure that Norwegian cryptocurrency exchanges and those overseas operating in the country observe domestic money laundering rules.

The laws won’t affect individuals trading in cryptocurrencies in Norway as the FSA has specifically stated that the new legislation will only affect, “Norwegian providers of virtual currency exchange and storage services.”

Thus, those storing private keys on behalf of customers are considered to be involved in “the transfer, storage or purchase of virtual currency” and come under the new guidelines. However, “Storage solutions that do not store private cryptographic keys (often referred to as non-custodial wallets) are not covered by the regulations,” such as “Individuals who buy or sell their own virtual currencies for private purposes” and those who “assist friends and acquaintances with the purchase and sale of virtual currencies” won’t be subject to the FSA’s new reporting requirements.

Norway is one of a growing number of nations exploring the viability of a central bank cryptocurrency. There is no specific law telling Scandinavian banks how to view cryptocurrency, there is, however, anti-money laundering legislation already in place. These laws demand that those offering financial services must follow KYC practices. Another Scandinavian central bank, Sweden’s Riksbank, has considered its own cryptocurrency e-krona, with the same motivations as its Norwegian neighbor, having observed cash use on the decline across the country.

The focus has fallen on Norway recently with more cryptocurrency miners reportedly looking to move their operations to Norway and its Swedish neighbor. Hydroelectricity and other renewables from more developed European countries allow for cheaper electricity tariff’s beneficial to profits, as electricity is the main overhead in the crypto mining process.

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Japan Gets New Pro-Crypto Minister to Promote Tech and IT

Japan’s prime minister has appointed the country’s new Science Minister with a proven pro-blockchain history.

Japan’s latest cabinet appointment Takuya Hirai will also take on the important post of Minister of Technology and IT at a time when Japan is ramping up its focus on all things blockchain across the sectors.

The cryptocurrency community will be looking at this appointment with great interest as Minister Hirai, a member of Japan’s Liberal Democrats, has been a significant political player in the past in determining cryptocurrency legislation. He has also been a promoter of emerging technologies such as blockchain.

Earlier this year Hirai was General Advisor to a government-backed study group which had been asked to lay down further rules for the adoption of ICOs, and to offer proposals to the Financial Services Agency (FSA), Japan’s financial regulator. The minister was also the architect of the 2017 law that legalized cryptocurrencies in the country.

Hirai hasn’t shied away from promoting blockchain in Japan and as part of his role as chairperson of the Liberal Democratic Party’s IT Strategy Special Committee, as well as chairperson of the Fintech Promotion Parliamentarians’ Federation; he continues to advance the interests of blockchain companies. Hirai also drafted Japan’s basic cybersecurity law, which was enacted in 2015

The Financial Services Agency (FSA) has tightened its registration screening for cryptocurrency exchanges this year. The FSA is cleaning up its act somewhat after recent hackings, notably following the compromise of Tokyo-based Coincheck’s exchange, with losses to the tune of roughly $530 million. The FSA followed this up by a series of onsite inspections recently which revealed that best practice was not being observed by many exchanges.

It’s thought that Hirai’s appointment, as a minister versed with the new technology and digital currency, demonstrates the government’s determination to not only advance blockchain technology in Japan but to also clean up the industry and create workable rules for ICO’s, and also in the monitoring of exchanges by the FSA.

Due to Japan’s vibrant cryptocurrency space, there are currently estimated to be about 160 exchanges hoping to enter the Japanese market.

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Japanese Regulators Introduce New Crypto Exchange Screening Rules

Japan is to tighten some of its screening procedures for government approval for cryptocurrency exchanges.

A Japan Times report suggests that the Financial Services Agency (FSA) has “tightened its registration screening for cryptocurrency exchanges to see whether they are properly conducting risk management”, although the report hasn’t been confirmed by Japanese authorities.

According to sources, these new measures would essentially delve deeper into the nature of the applications than is currently the norm for applicants when making a case to operate in Japan, with a four-fold increase in questions. It is reported that possible links to antisocial groups will now be investigated and companies decisions making processes. The unnamed source stated on the weekend that the FSA had:

“…increased the number of questions asked when screening applications to about 400 items, up fourfold…Previously, the questions only covered such items as an applicant’s financial status and measures to ensure system safety.”

The FSA is cleaning up its act somewhat after recent hackings, notably following Tokyo-based Coincheck’s exchange was compromised to the tune of roughly USD 530 million. It followed this up by a series of onsite inspections recently which revealed that best practice was not being observed by many exchanges.

A key finding of the report following the last FSA inspections was that exchange’s internal control systems were showing signs of lagging behind, given the rapid increase of transactions; an increase partly accredited to investors climbing back into the market after 2017 recent falls. The Japan Virtual Currency Exchange Association (JVCEA) had called for trading limits in line with FSA suggestions earlier this year.

As part of the newly heightened examinations of exchange applications by the FSA, the agency earmarked six fully-licensed crypto exchanges which have been served with business improvement orders. Also, 13 exchanges who are operating whilst waiting for approval have withdrawn their applications, indicating just how rigidly they expected to be examined under the new application guidelines. Only three exchanges are left operating awaiting vetting by the FSA: Coincheck, Lastroots, and Everybody’s Bitcoin.

Due to Japan’s vibrant cryptocurrency space, there are estimated to be about 160 exchanges hoping to enter the Japanese market. The JVCEA recommended its own “appropriate regulations” for growth by proposing new rules that would affect the way exchanges operate, placing privacy coin listings and insider trading under the regulatory microscope.

 

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Coinsquare Expands Into European Market, Eyes Japan

Canadian Ontario based crypto exchange Coinsquare is expanding into European market towards the end of this year.

Coinsquare is one of Canada’s principal crypto exchanges and also claims to be the nation’s most secure platform for crypto trading. Founded in 2014, the exchange has over 100,000 users. It supports seven cryptocurrencies and four fiat currencies: the British pound, Canadian dollar, euro, and US dollar. In July, the FSA in Japan received Coinsquare’s application to also operate there.

Its new European users will also have access to the same North American selection of coins- Bitcoin, Bitcoin Cash, Ethereum, Litecoin, XRP, Dogecoin, and Dash. Thomas Jankowski, Coinsquare’s Chief Digital, and Growth Officer commented on the latest move:

“Coinsquare is a regulated, fully-compliant trading platform and we’re thrilled to offer the European market the same secure and intuitive interface that we offer to Canadians.”

Until now, Coinsquare has only been open to Canadian citizens or residents. The users had to register by submitting relevant documentary proof like driver’s license, passport, national ID card, residence permit or in the case of Quebec, a healthcare card for verification. According to Coinsquare, its move into Europe by partnering with businesses will enable it to:

“…launch fully white-labeled platforms that offer a consistent brand experience, and are specifically tailored to individual markets and the needs of their clients.”

Along with these developments, the company also launched a subsidiary in July, called CoinCapital. Registered with the Ontario Securities Commission (OSC)  as an exempt market dealer, investment fund manager and portfolio manager CoinSquare sees it as a worthwhile addition to the main company. The company commented:

“This new division will offer a suite of investment products focused on emerging technologies including blockchain, artificial intelligence, and cryptocurrencies.”

Canada is rapidly becoming a world leader in embracing cryptocurrency and blockchain technology, behind the US and the UK. Due to provincial research and development, low energy costs, high-speed internet and internal regulation, Canada — the home of Ethereum, has become an established global leader in blockchain innovation.

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Japan’s FSA: Finding Balance Key as Transactions Overheat

Japan’s regulator, the Financial Services Agency (FSA), has suggested that there needs to be a balance between consumer protection and technological innovation as the blockchain industry expands.

The government body’s top regulator Toshihide Endo has suggested that the industry needs to grow under “appropriate regulation” and as such won’t need government intervention to further enforce curbs on how exchanges operate within the country.

On-site inspections of Japanese exchanges by the FSA early this month revealed that investor protection remains a key issue but as the commissioner stated, the government has “no intention to curb excessively”.

A key finding of the report following the last FSA inspections was that exchange’s internal control systems were showing signs of lagging behind, given the rapid increase of transactions; an increase partly accredited to investors climbing back into the market after 2017 recent falls. The Japan Virtual Currency Exchange Association (JVCEA) had called for trading limits in line with FSA suggestions earlier this year.

The JVCEA, which has already applied to the FSA to become cryptocurrency’s one and only self-regulatory body in the country, had attempted to stem the tide of transactions earlier this month when it recommended its own “appropriate regulations” for growth by proposing new rules that would affect the way exchanges operate, placing privacy coin listings and insider trading under the regulatory microscope.

Another tool for limiting the transaction surge suggested by JVCEA was to enforce trading caps and restrictions according to age group, i.e. the very old and the very young. The FSA regulator has already released figures showing that in April, there were 142,000 crypto traders in Japan. That monthly figure represents a small percentage of the total of 3 million Japanese traders.

The JVCEA has suggested that the new borrowing limit for trading platforms in Japan should be set at four times the customer deposit when margin trading. Currently, there are no limits on how much cryptocurrency investors can borrow when trading in this way.

 

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Japanese Crypto Exchanges’ Self Regulator Applies for Official Status

The recently formed Japan Virtual Currency Exchange Association has applied with the country’s financial regulator to become recognized as the official self-regulatory body representing cryptocurrency in Japan.

The JVCEA comprises of 16 licensed crypto exchanges, who are self-described as security inspectors of Japan’s cryptocurrency exchanges. The association has gone to great lengths to cover all aspects of how exchanges should function, drawing up nearly 1,000 pages of self-regulatory measures. The JVCEA was formed by Japanese crypto exchanges earlier this year in response to a $534 million heist on the Coincheck platform.

The chairman and president of the organization is Taizen Okuyama of Money Partners. Bitflyer CEO Yuzo Kano is the vice chairman, along with Bitbank president Noriyuki Hiroeno. The other two directors are SBI Virtual Currencies’ Yoshitaka Kitao and GMO Coin’s Tomitaka Ishimura. The JVCEA has said in a statement that it hopes to contribute to “the sound development of the virtual currency exchange industry and the protection of the interests of users.”

Its application for certification filed with Japanese Financial Regulator (FSA) will allow it to become what it calls a “certified fund settlement business association,” which will provide “guidance and recommendations to members to comply with regulations, laws and self-regulation rules.”

The JVCEA is not the only Japanese cryptocurrency association, as two others exist; the Japan Blockchain Association (JBA) and the Japan Cryptocurrency Business Association (JCBA), and most crypto exchanges are members of one of these organizations.

The JVCEA has already proposed regulations in place which it would hope to make official should the application to become the country’s cryptocurrency representative body be accepted by the FSA. The new rules would affect the way exchanges operate, and according to local news sources, privacy coin listings and insider trading will come under the regulatory microscope.

As suggested before, the JVCEA will enforce their 4 times leverage trading cap limit rule and possibly enforce trading restrictions for both the very young and the elderly. It has been reported that the FSA would be entrusting the new body with “the flexibility to rapidly develop technologies and to combine technological innovation and customer protection.”

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World’s Fifth Largest Bank Joins Crypto Space with Digital Yen

Japan’s Mitsibushi UFC Financial group (MUFG), the world’s fifth-largest bank by assets, has announced it will trial its own digital currency as early as 2019, reports Cointelegraph.

The move, which dates back as far as 2016, sees the Japanese giant running out the coin, valued at one yen, to 100,000 account holders, according to Japanese broadcaster NHK.  The bank suggests that its MUFG coin will be usable in a number of retail outlets, bars, and restaurants, and will also be transferable to other participant’s accounts.

MUFG will be checking to see that it’s all working as intended and that settlements are carried out smoothly and securely. It is reportedly broadening the pilot by offering the currency to a variety of businesses in order to expand the test.

Japan has seen increased interest in digital currency from some of the country’s largest cooperations, with DMM’s announcement that it was ready to trade in cryptocurrency and, most significantly, Yahoo Japan’s announced 40% stake in BitARG, planned for later this year. The deal, worth between USD 18.5 million and USD 27.8 million, allows BitARG to operate a domestic trading platform under FSA rules, making it a viable investment opportunity for Yahoo.

The Japanese Central Bank continues to be wary of cryptocurrency, with numerous warnings issued to customers regarding the perils of dabbling in digital currency, even issuing a negative Q and A for customers earlier in the year in order to test public knowledge and warn about the risks of crime.

Also Japan-based global investment bank Nomura has just announced its latest project; to establish a custody offering for digital assets.  The new project aims at removing barriers to institutional cryptocurrency investment.

Although news regarding large banks like MUFG and companies such as Yahoo walking the crypto path serves to give some extra legitimacy to the Japanese cryptocurrency market, there are still those who feel the ethos of the industry has been somewhat altered. Many crypto enthusiasts feel that the creation of Bitcoin was a positive step towards bypassing the monopoly of institution banking after the financial turmoil of 2008.

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Japanese Crypto Enquiries Tripled in 2017

Figures released after the second cryptocurrency exchange group this year hosted by Japan’s FSA on 27 April show a tripling of cryptocurrency enquiries since the same time last year.

The first such meeting which took place last month revealed that there were 3.5 million now trading in cryptocurrency in Japan. These new figures confirm the massive spike in interest in digital currencies over the course of the last year.

Japan’s Consumer Affairs Agency (CAA), which compiled the figures, said that 2,769 domestic enquiries were filed in 2017 on topics related to cryptocurrencies, whereas the previous year the total was only 847. However, the agency confirmed that many of the enquiries were concerned with exchange platforms’ security and the legitimacy of certain ICOs. Most of the enquiries were from the 40s to 50s age group although there was only a slightly lower percentage in other age groups. Some calls were even from parents with concerns for their teenage children using cryptocurrency.

The release of this data by the FSA, after two meetings of the exchange group, is the agency’s latest move to bring greater transparency to Japan’s burgeoning cryptocurrency environment. According to it, study and disclosure of domestic trading statistics is a step towards a thorough examination of Japanese cryptocurrency trading. It represents a significant move in light of the recent hacking of domestic exchange Coincheck on 26 January, during which 526 million XEM tokens worth USD 400 million was stolen.

Forbes reports that the FSA has recently taken another step towards preventing such hacking events by encouraging cryptocurrency exchanges to give up handling Monero (XMR), Zcash (ZEC), and Dash and other anonymous cryptocurrencies favored by hackers.

Japan’s licensed cryptocurrency exchanges have also recently formed a self-regulatory body that will have enforcement power over its members. The organization would be able to create a whitelist of favourable exchanges while being able to pressure exchanges into delisting any cryptocurrencies the FSA might regard as suspect.

image source: https://pixabay.com/en/question-mark-pile-question-mark-2492009/ – qimino

 

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Japan Crypto Traders Soar Past 3 Million

Individual cryptocurrency traders in Japan now exceed three million according to the country’s Financial Services Agency (FSA) figures just released.

The figures represent domestic data recorded from 17 cryptocurrency exchanges as of 31 March this year; the first time that the FSA has made such a survey since its founding in 2000. The agency reported that the Asian economic giant has some 3.5 million people trading cryptocurrency, with those between the ages of 20 and 40 representing 90% of the crypto trading population.

The FSA is a Japanese government agency and an integrated financial regulator responsible for overseeing banking, securities and exchange, and insurance sectors in order to ensure the stability of Japan’s financial system.

The release of this data is the agency’s latest move to bring greater transparency to Japan’s burgeoning cryptocurrency environment. According to FSA, study and disclosure of domestic trading statistics is a step towards a thorough examination of Japanese cryptocurrency trading. It represents a significant move in light of the recent hacking of domestic exchange Coincheck on 26 January, during which 526 million XEM tokens worth USD 400 million was stolen.

Following the hack, Coincheck’s Koichiro Wada reflected on Japan’s need for more skilled professionals: “We were aware we didn’t have enough people working on internal checks, management and system risk… in many ways the industry continues to deal with its ramifications”.

The new data also reveals the split between trading in Bitcoin and the practice of trading on Bitcoin margins, credit, and futures as an underlying asset. Actual Bitcoin trading volume grew from USD 22 million in March 2014 to USD 97 billion in 2017, whereas the more speculative forms of trading rocketed from USD 2 million in 2014 to a huge USD 543 billion in 2017 alone.

The number of Japanese stores that accepted Bitcoin as payment stood at 52,190 at the end of March, while only 80 stores accepted Ether.

 

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Yahoo! Japan to Launch Crypto Exchange

Yahoo! Japan has acquired 40% of the already well-established local exchange BitARG, hoping to open a full-scale exchange operation within 12 months.

All set to roll out in April 2019, the new exchange will be built upon the BitARG system. Yahoo! Japan is set to make additional purchases in BitARG, which will register with the Financial Service Agency (FSA), early 2019.

Yahoo! Japan made the purchase through Tokyo’s YJFX, a foreign exchange transaction subsidiary that operates foreign exchange transactions services. Its cost has been reported to be JPY 2 billion (USD 19 million) for a 40% stake in BitARG. Newly-issued stock has been purchased to cover any outstanding shares.

YJFX has already planned the next stage of this business execution, sending executives and engineers to be dispatched to BitARG, where they will look in depth into the systems and administration over the next 12 months till the official platform is launched.

A statement published by the FSA on Friday suggested Binance was being held under the microscope and was about to receive an official warning, given its lack of registration with the FSA.

Zhao Changpeng, Binance CEO stated: “No need to worry. Some negative news often turns out to be positive in the long term. Chinese have a proverb for this. New (often better) opportunities always emerge during times of change.”

This latest developmentcould give the community a clearer outlook on the future of cryptocurrency, but could as easily be the pullback before the market moves forward. The speculation is that imposing regulations could present opportunities for big conglomerates to buy in at low prices before a parabolic rise within the ecosystem.

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