Japan’s financial regulator, the Financial Services Agency (FSA), has finally released the final draft from last week’s group meeting for the rules to be followed by digital asset service providers.
The rules are formulated to address a variety of key areas like coin listing, margin trading, hacking, crypto custodial services and more.
As per the report, the FSA has stated that the rules shall either be followed under the counsel of a self-regulatory organization (SRO) or be followed individually by crypto service providers. As of now, only one self-regulatory organization, by the name of Japan Virtual Currency Exchange Association, is approved by the Financial Services Agency.
For digital exchange operations, the report has identified nine areas that need to be addressed. The report clearly states that crypto services providers need to communicate information regarding trading prices in order to facilitate proper business operations. They must also follow the rules under the guidance of an approved SRO.
In addition, digital asset service providers are barred from promoting or advertising speculative trading. The report also states that crypto service providers cannot deal in digital currencies which pose a threat to proper business operations or user protection.
For margin trading, the digital currency service providers are required to make a registration under the forex trading category. The report also states that a limit will be put on a digital currency’s leverage ratio. This limit will be formulated on the basis of the fluctuation in the price of the digital currency. Service providers are required to specify risks associated with digital currencies and henceforth impose the minimum margin. The report also detailed that crypto credit will follow rules similar to margin trading.
The report also elaborates on unfair acts in digital currency spot trading. As per the rules, every entity and person is barred from manipulation of prices of cryptocurrencies through rumors, or improper conduct.
Furthermore, as per the report, crypto custodial services will be regulated in a manner similar to cryptocurrency exchanges.
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