The central intention is to take control over the cryptocurrency industry and avoid irregular events like cyberattacks
In recent publications issued by different Japanese media, at the end of May, it was informed that the Japanese Parliament approved an amendment which strengthens the laws that regulate the use and control of cryptocurrencies in that region.
The purpose of this change is to avoid, through the best means, using this technology for scams, theft and money laundering. Similarly, it seeks to create for the common user a suitable environment for both personal and commercial use.
The Financial Instruments and Exchange Act, and the Liquidation of Funds Law, are the names of the laws that received this legal modification, and are tools that were created in order to eradicate speculation with cryptoactives, reduce irregular trade with digital currencies and protect users from scams and hacker attacks. Most of the changes are in the area of protection, since the rules regarding control issues and punishable acts were reinforced.
The amendment puts atight control on the use of these financial tools, this is in order to protect, in a categorical way, the entire Japanese financial system, which could be affected or influenced if this technology gains strength in trade. It is still unknown if this strengthening of the laws could negatively impact the crypto industry in the Asian country, but it is expected that the measure will only help users feel more secure when using cryptocurrencies.
It should be noted that the amendment obliges all financial systems in the country not to denominate cryptocurrencies with that name, but change the name and call them “cryptographic assets, with the unique purpose of avoiding all kinds of confusion with the rest of the official currencies that the Japanese financial system manages, such as the Yen, the US Dollar or the Euro. In this way, differences are specified, so these laws have a special treatment with these assets.
In addition, it would be established that exchange houses must have a cryptocurrency fund as a way of protection to ensure reimbursement for users if it is necessary, especially after cases of theft by hackers, or some other type of error in a system that could generate losses to the user. This happens as result of experience in cases such as Coincheck, the Japanese exchange house that suffered a cyberattack which caused losses of more than 530 million dollars in cryptoactive.
In this amendment to the Financial Instruments and Exchange Act, it is also highlighted that security tokens and Initial Coins offerings (ICOs) are now considered securities and will be regulated and denominated in that way.
The Financial Services Agency (FSA) of the country received the text for its establishment in all monitoring and control processes related to cryptoactive. This institution has been the main precursor for the strengthening of legal instruments in order to ensure control over cryptocurrencies until there are better monitoring mechanisms.
By María Rodríguez