FSA Commissioner Says ‘No’ To Excessive Regulation Of Japanese Cryptocurrency Exchanges

The newly appointed commissioner of the Financial Services Agency (FSA), Japan, Toshihide Endo clearly mentioned that he believes that there is no need for excessive regulation of the country’s cryptocurrency exchanges. While speaking to Reuters on August 22, Endo said that the FSA is trying to regulate cryptocurrency exchanges in a manner that safeguards the interests of the consumers and yet doesn’t end up stifling innovation.

Endo told Reuters in his statement that the agency has no intention of curbing the cryptocurrency industry in an excessive manner. He added that they would like to see it evolve under appropriate regulation. His comments echoed the statements that were previously made by the FSA representatives.

The Japan Times quoted an unnamed executive of the regulator in September 2017 wherein the executive mentioned that the agency pursues both enforcement of regulation on cryptocurrency exchanges as well as market fostering. He added that the agency always aims for sound market development.

This comment was made by the FSA executive despite the agency beginning to scrutinize exchanges even more closely to ensure that they adhere to a revised payment services law that was passed in April 2017. The new rules set up a licensing scheme for crypto exchanges and defined their operational standards. The rules also led to recognizing Bitcoin as a form of legal tender in Japan, as stated in the CoinDesk report.

The FSA had become strict earlier with respect to regulation of cryptocurrency exchanges in Japan, after the Coincheck exchange hack of $530 million that took place in January, this year. This incident led the FSA to issue business improvement orders for exchanges that apparently had inadequate systems in place. It also prompted the agency to launch detailed inspections of these exchanges. Prior to being appointed as the commissioner of the FSA in July, Endo previously served as the director general of the agency’s supervisory bureau.

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