The Japanese Financial Services Agency (FSA) is considering the possibility of changing the legal and regulatory framework for controlling exchange operations with bitcoin and other cryptocurrencies, Сointelegraph reports.
In particular, the FSA is considering the issue of regulating crypto exchanges in accordance with the Financial Instruments and Exchange Act (FIEA), instead of the currently used Payment Services Act. This means that exchanges will have to provide more reliable protection of customers. FIEA obliges financial companies to manage clients' funds and securities, such as shares, separately from corporate assets.
According to the current legislation, cryptocurrencies are legally positioned as the same means of payment as electronic money. If FSA starts to regulate exchanges within FEIA, crypto assets will be treated as a financial product. FIEA will also open the possibility of introducing cryptographic derivatives, such as exchange-traded funds (ETFs).
Coincheck hack forced FSA to tighten crypto regulation. After this incident, FSA began to investigate the activities of 15 unregistered exchanges, revealing a number of security flaws and regulation of business transactions.