On March 31, a law firm from Japan released a report covering all aspects of crypto assets in Japan. Interestingly, Double jump.tokyo the game developer behind My Crypto Heroes, founded this law firm called So & Sato.
Based on the report published by So & Sato, strict regulations are likely to benefit new players in the long run. Let’s have a look at this report, to learn more about the local crypto industry.
It is worth mentioning that local regulations for cryptocurrency regulations are more strict than in most countries around the world. However, according to the representatives of this law firm, strict regulations would be beneficial in the long run. Thanks to strict regulations it is easier to attract traditional financial institutions.
In Japan, crypto is regulated according to the Payment Services Act (PSA) as well as the Financial Instruments and Exchange Act. Last year, Japan passed amendments to tighten existing regulations.
According to new PSA regulations, crypto exchanges must employ third party operators. The purpose of this regulation is to keep money that belongs to clients separately from their cash flow.
Foreign crypto exchanges and Japan
Foreign crypto exchanges that would like to operate in Japan have to take into account one very important aspect. They must hold a license in both in their jurisdiction as well as Japan.
As a reminder, local cryptocurrency exchanges must obtain a license and the country’s Financial Services Agency is in charge of this process. As stated-above foreign crypto exchanges should also obtain a license and they also should comply with local regulations.
At the moment, there are 23 crypto exchanges in Japan and all of them are local exchanges. This does not mean that there is no interest from foreign companies. For example, some Chinese exchanges purchased a local crypto exchange that already had a license to operate in Japan.