Crypto Exchanges In Japan Should Be Regulated Like Banks – Monex CEObr>
Oki Matsumoto, CEO of Japanese online brokerage Monex Group, said that Japanese crypto exchanges need to have tougher regulations in place.
Monex Group, currently valued at around $870 million, has a wide portfolio of assets focused on providing services mainly to retail clients. Last week, it completed the 3.6 billion yen ($33.6M USD) acquisition of Coincheck, a Japanese cryptocurrency exchange that lost over $400 million worth of customers’ XEM tokens in a breach uncovered in January.
In an interview with Reuters, Matsumoto said that regulators seeking to legitimatize cryptocurrency exchanges should consider employing well-established banking regulations in place of developing crypto-specific legal stipulations.
“Japan’s exchanges do both matching and custodial services – they’re close to a bank,” Matsumoto said. “To someone in the financial industry like myself, it’s common sense that regulations will get stricter.”
Last year, the Japanese government introduced rules that require crypto exchanges to keep customers’ and company assets separate. The practice, however, has not been clearly defined. In contrast, online brokerages, such as Monex, have strictly enforced rules for separating assets and are required to keep customers’ cash and stocks at trusted third-party locations.
At one point, there were 32 cryptocurrency exchanges operating in Japan, 16 of which have received approval from the country’s financial regulator. The remaining 16 have also been given approval while their applications are being reviewed. Since the Coincheck hack, however, the Financial Services Agency (FSA) introduced tighter regulations for exchanges, including developing and implementing improved data security measures. These requests proved too much for some exchanges, and they subsequently ceased operating in the country.