Japanese FSA Issues Licenses to 11 Cryptocurrency Dealers

A total of 11 companies have received a cryptocurrency dealer license from the Japanese Financial Services Agency (JFSA). The firms notably include companies related to the retail foreign exchange arena in Japan - Money Parters and GMO Coin.

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A revision in Japanese law in April ordered companies that deal with Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term to become licensed by the financial regulator. The Japanese Treasury Department appears to have taken a different approach to many other jurisdictions.

While the decision may seem pro-active, it was most likely driven by the demise of Mt. Gox Mt. Gox Mt. Gox is the name of a Japan-based cryptocurrency exchange that was infamously hacked for 850,000 BTC worth roughly $450 million at the time in February of 2014. During July 2010 Mt. Gox formally launched Mt. Gox launched its exchange and price quoting service. It was subsequently sold to French developer Mark Karpelès in early 2011.Prior to its hacking, Mt. Gox suffered from other security vulnerabilities as early as June 2011. On 19 June, 2011, a security breach of the exchange caused the no Mt. Gox is the name of a Japan-based cryptocurrency exchange that was infamously hacked for 850,000 BTC worth roughly $450 million at the time in February of 2014. During July 2010 Mt. Gox formally launched Mt. Gox launched its exchange and price quoting service. It was subsequently sold to French developer Mark Karpelès in early 2011.Prior to its hacking, Mt. Gox suffered from other security vulnerabilities as early as June 2011. On 19 June, 2011, a security breach of the exchange caused the no Read this Term, one of the first major exchanges for cryptocurrencies.

The licenses come with a list of disclaimers from the FSA stating that the Japanese Treasury does not guarantee or control the value of digital currencies. Authorities also highlight that cryptocurrencies are not necessarily backed by any assets.

The list of Japanse FSA-regulated cryptocurrency dealers also includes QUOINE, BitFlyer, Bit Bank Corporation, SBI Virtual Currencies, Bit Trade, BTC Box, Bit point Japan, Fiscal Virtual Currency Exchange, and Tech Bureau.

Fraud Warnings

Despite licensing the asset class operators, Japanese authorities are warning about the rise of cryptocurrencies and the number of fraudulent coins out there. The Japanese public is advised to be vigilant of unlawful activity.

Hours ago, the Financial Services Commission of Korea banned all initial coin offerings as well as leveraged trading of cryptocurrencies, echoing China's recent move. This was a prudent action, as the authorities seek to protect unsophisticated investors from trading excessively volatile instruments such as cryptocurrencies.