Japan’s FSA approves 11 companies as operators of cryptocurrency exchanges

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TOKYO (Reuters) – Japan’s Financial Services Agency approved 11 companies as operators of cryptocurrency exchanges, the financial watchdog said on Friday.

The Japanese government has recognized bitcoin as legal tender in April and required cryptocurrency exchange operators to register with the government.

The move was aimed at avoiding a repeat of a failure in 2014 of Tokyo-based Mt Gox, the world’s largest bitcoin exchange at the time.

The financial watchdog has laid out various requirements, such as building a strong computer system, segregation of customer accounts and checking the identity of customers, a key issue given concerns cryptocurrency could be used for money-laundering.

Trading in bitcoin and other cryptocurrencies among Japanese investors has gained momentum this year, helped by the legal recognition as well as spectacular surges in the price of bitcoin and ethereum.

With the new regulation, Tokyo aims to balance the need to protect investors with the need to support fintech innovations, FSA officials said.

Officials this month said they have no plan to ban ICOs although there have been few such offerings in Japan to date.

Tokyo’s stance is in contrast with those of other regulators in Asia.

Beijing this month ordered some bitcoin exchanges to shut. And earlier on Friday, South Korea’s financial regulator said it will ban raising money through all forms of virtual currencies.