
Regulation of the CryptoCurrency Exchange Industry
As cryptocurrencies take us into new territories, new concerns arise as to the implications of new digital economy in which they exist. Recent years, for example, have seen a rise in concerns over the need to protect the rights of users of cryptocurrencies and to prevent cryptocurrencies from being used to fund terrorist and other dangerous organizations. In Japan, official regulation of cryptocurrencies began in April 2017 with the introduction of a requirement for those handling cryptocurrencies to register with the Financial Services Authority (FSA). This system came with a period of leeway in which those already carrying out business involving the exchange of cryptocurrencies could continue business without hindrance as long as they registered within the 6 months from April 2017. In addition to registering with the FSA, cryptocurrency exchange businesses must also carry out other obligatory procedures such as submitting regular business reports, performing audits regarding the separation of management for money and cryptocurrency and more. ※N.B. Those engaging in the trade of cryptocurrency as individuals not seeking to earn profit will most likely not be covered by these new regulations, but please contact us if you are unsure about your particular case.What exactly is being regulated?

Basic Registration Requirements
Put simply, the basic registration requirements for those wishing to engage in Japan’s cryptocurrency industry are as follows. N.B. These are general requirements and do not necessarily reflect the reality of what may be needed for your specific application.Information Handling
- The registration process will check your handling of information (e.g. compliance management system, handling of client data, systems for tracking transactions).
Personnel
- You will need to demonstrate that you have an appropriate team established, including people such as a manager, compliance manager, internal auditor and system manager.
Service Requirements
- You will need to show that the service you are handling qualifies as related to cryptocurrency.
Finances
- You must have ¥10m in capital funds.
- Other areas of your finances (e.g. net assets) will also be examined.
- You must be able to show that your management of money and cryptocurrency are carried out separately.
Location
- You must have an appropriate office space secured from which to carry out your business.
Contact Us
For any further questions please do not hesitate to contact us!
