On the back of recent moves by the Chinese authorities, the Japanese financial regulator is now turning its attention to the fervour surrounding cryptocurrency.
The Financial Services Agency (FSA) in Japan will put virtual currency exchanges operating in the country under full surveillance from October.
The FSA will monitor whether the exchanges for Bitcoin and other digital currencies have appropriate internal systems, including ones to protect customer assets. If necessary, the agency will carry out on-site inspections.
Surveillance Team Established
All digital currency exchanges operating in Japan are required to register with authorities by the end of September under the revised payment services law that went into effect in April. There are thought to be more than 20 such exchanges in Japan.
In August the FSA established a 30-strong surveillance team including agency and local finance bureau officials with relevant expertise. The team is checking whether virtual currency exchanges manage customer assets separately from their own assets and whether they have appropriate risk management measures, including how to respond to cyberattacks, in place.
Chinese Action
Earlier this month internet finance regulators in Beijing ordered all cryptocurrency exchanges in the Chinese capital to issue notices to cease trading. So far two of the largest Chinese Bitcoin exchanges Huobi.com and Okcoin.cn announced that they will cease trading by the end of September.
BTC China, another major cryptocurrency firm, issued a statement that it would also halt trading by the end of September. Exchanges in Shanghai and Shenzhen are also expected to be closing their doors in the coming days. BTC China has also been considering establishing an exchange outside of China.
