The Financial Service Agency (FSA) of Japan is reportedly looking to crack down on unregistered crypto investment firms and bring them under the Financial Instruments and Exchange Act. Tentative dates for the aforementioned action have not been announced yet.
It stems from a legal loophole which allows unregistered investment firms to collect funds in cryptocurrencies rather than cash, an oversight the FSA is keen to rectify.
The issue became a highlight due to the increased number of crypto pyramid schemes being unearthed in Japan. Tokyo Police in November arrested eight men over the charges of collecting of JPY 7.8 billion (USD 69 million) in cryptocurrency using such schemes. A major chunk of the funds collected was in Bitcoin, whereas only JPY 500 million (USD 4.4 million) was collected in the form of cash. Officials claimed that the scam would not have come to their notice had the culprits only used cryptocurrency.
The FSA has kept a close eye on crypto-related businesses and firms since the collapse of the Mt Gox exchange back in 2014. The agency regulated crypto exchanges by introducing a licensing scheme and conducting inspections of the exchanges for their security and compliance with anti-money laundering laws.
Recently, reports surfaced that the FSA was looking to allow crypto exchange-traded funds (ETFs). However, over the concerns of enhanced speculations, it has now refused to allow the trading of crypto derivatives on financial exchanges.
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