BitFlyer Japan, forced to close to new users

The Japanese Financial Agency Service has imposed a licence requirement to continue trading operations. The case of bitFlyer Japan, forced to close to new users

BitFlyer Japan, forced to close to new users: Leggi qui l’articolo in Italiano

Japan wants to regulate cryptos.

In essence, The Japanese Financial Agency Service has imposed a licence requirement to continue trading operations. The case of bitFlyer Japan, forced to close to new users

This is why FSA, the Japanese Financial Services Agency, is monitoring the digital currency market.

But not without consequences.

The FSA has introduced some important novelties, forcing the exchanges to obtain a license, otherwise, the platforms will have to close down.

Will these changes really have positive consequences?

Are there any exchanges that are in danger of being closed?

And if so, who would suffer the worst consequences?

Meanwhile, the prices of cryptos could be affected.

On the other hand, when an exchange has problems, closes or is hacked, the prices of cryptos often suffer, sometimes a lot.

It is also true, however, that the FSA has been applying for this type of licence since April 2017, so everyone should be able to adapt.

The case of bitFlyer

BitFlyer is one of the most important Japanese exchanges and must, therefore, deal with the FSA.

Just today, 22 June, bitFlyer Inc. responded to the FSA, in accordance with section 63-16 of the Payment Services Act.

This order has been placed with bitFlyer Japan and not with its entities located in the USA or Europe which, of course, are subject to different regulations depending on the jurisdiction of the country in which they operate.  

The order received by bitFlyer Japan relates to KYC, the customer identification procedures. Basically, bitFlyer is required to check all customer IDs.

At the moment, the most important consequence is that, due to the considerable work to be done, the platform has closed to new users. And most importantly, we do not know when it will reopen.

Therefore, while regulation could encourage a lack of fraud and money laundering, it is the customers who suffer as a result, as the opportunity to open an account is closed.

Details of FSA requests

This is what the document sent by the FSA to bitFlyer says.

The new measures to be taken are:

1. Review of the management system
2. Building an AML risk management system to combat terrorism
3. Building a system to reject antisocial forces
4. Build a management system for user assets and adopt a management approach for documents
5. Building protective measures for users
6. Building a system to manage risks
7. Building an information system for user security
8. Build a management system to ensure appropriate interaction for customer complaints
9. Build a management system to list new cryptos

With regard to points 1 and 9, a third party must verify the effectiveness of the improvements.

A plan for these changes must be submitted in writing to the FSA by 23 July.

Until these changes are made, bitFlyer must submit a monthly report to the FSA, by the tenth day of each month, with details of the progress of the required implementations.

Are we happy with this type of regulation? Will all cryptos really end up under state control? And if it happens then what will happen to the privacy that pushed many people to get closer to cryptos?