After Mt. Gox collapse, Japan evaluates to regulate bitcoins exchanges

A legal framework regarding virtual currencies is under preparation

Japan.- The Financial System Council, a group under Japan’s Financial Services Agency (FSA), is working on a report that would lead to the regulation of bitcoins and other digital currencies and exchange operators. On January 4, during Diet session, the legal framework resulting from this report will be addressed.

In 2014, after Mt. Gox’s CEO Mark Karpeles was arrested for allegedly transferring ¥20 million (US$166,000) from the company’s client money into his personal account to pay for expenses he incurred with “several women whom he met at venues that offer sexual services.” Karpeles says the site was hacked and claims innocence. This case exposed the lack of regulation in the Asian country and it is listed as a reason to require information disclosure not only to regulators, but also to clients.

Some of the rules operators are expected to comply with are: mandatory registration of virtual currency exchanges with the FSA, mandatory checks on exchange operators by certified public accounts or auditing firms, operators will be compelled to confirm the customers’ identities when they open accounts and they ought to report questionable trading to the authorities. Moreover, operators must maintain certain amount of capital and they are expected to manage their clients’ assets and their corporate assets separately.