Japan Bitcoin exchanges is under close scrutiny and surveillance starting from October
Starting next month, all cryptocurrency exchange internal systems in the country will be closely monitored by Japan’s Financial Services Agency (FSA).
The revised payment services law that was passed earlier in April for companies in cryptocurrency to comply with has spurred increased scrutiny as the Japan Times states.
In an aim to ensure that all exchanges fully comply with the new rules as the law specifies, they will at the end of September have to produce the necessary reports to the authorities.
The regulatory law is beneficial since it not only recognizes bitcoin to be a legal tender but also sets the operational standards that all exchanges have to follow.
The aim to regulate the exchanges is to foster a sound market that ensures the cryptocurrency market grows healthy as the financial watchdog asserts.
For on-site inspections, the regulator put together, last month, 30 staff specialized surveillance team to survey and monitor over 20 Japanese cryptocurrency exchanges.
Cryptocurrency based fraud is not a new phenomenon in Japan. In the first seven months of this year alone, 33 cases of fraud were reported where about a half a million of dollars was lost.
That is why the law has rules that know-your-customer and anti-money laundering enforces security standards that minimize cyber-attacks risks.
Mt Gox, A notorious bitcoin exchange company in Japan, made customers to lose fortunes when it collapsed in 2014. Such scenarios made Japanese lawmakers move speedily to regulate the industry.