The never-ending crypto scams are making the Japanese authorities feel uneasy. Despite being one of the crypto-friendliest countries in the world, Japan is not blind to the risks that come with digital assets.
Earlier this year the industry was granted a self-regulatory status but the officials are still concerned that the baddies might go under the radar. This time they are keeping an eye on cryptocurrency wallets. According to reports, wallet regulatory frameworks are underway. The Japanese Financial Services Agency (FSA) is working around the clock to further improve the digital asset ecosystem in the country.
At the moment the industry is self-regulated but it doesn’t mean that businesses are not listed within the FSA. However, this is valid only for companies offering trading services and as you have guesses wallets are not falling into this category. Put simply, the FSA assumes that as being part of the regulatory gray area, cryptocurrency wallets providers get the chance of doing all the nefarious things we wouldn’t want them to do. On the other hand, cryptocurrency trade indirectly involves the use of wallets. The latter makes the authorities believe that wallets should feel the strong hand of the law as well.
This is the moment were we should note that the upcoming regulations are most likely referring only to custodial wallets. The concerns are that third-parties, which are in charge of customers’ funds might abuse their power. Having that in mind, the officials do have a point here. Supposedly, the new rules aim to level up security to international standards. Obviously, they aim to cut off illicit practices such as terrorist financing and money laundering. Additionally, wallet providers will have to adhere to KYC policies.
However, it is unclear when the new regulations will take place.