Japan’s Financial Service Agency (FSA), responsible for the regulation of cryptocurrency operators in the country has revealed that over 100 cryptocurrency exchanges have shown interest to enter the market while eight others seek to leave.
The Japanese financial regulators came with these numbers after they conducted an assessment of the state of cryptocurrency in the country. The study was done last week by a committee comprising representatives from Japan’s Central bank, the Consumer Affairs Agency as well as the Ministries of Finance and Justice.
The cryptocurrency community was represented in the group by Taizen Okuyama, the president of the cryptocurrency operators’ self-regulatory group.
Cryptocurrency activities in Japan are regulated by the government and as such cryptocurrency trading platforms are expected to register with the FSA and abide by the regulations. While this has led to a growth of crypto activities in the country, some exchanges find it difficult to cope with the strict regulations particularly after they were strengthened following the attack on Coincheck exchange.
The FSA disclosed that eight dealers have indicated their intention to withdraw their applications to operate cryptocurrency exchanges in the country. These “pseudo-operators” are able to operate due to a provision in FSA’s law that allows exchanges to operate while their licenses are being processed.
“Eight deemed virtual currency exchange companies announce the intention to withdraw registration applications,” the FSA disclosed. The authorities said that one of the companies, Debit withdrew its application after it confirmed that it does not fall under the virtual currency exchange industry. The other seven exchanges who withdrew their applications were listed as – Tokyo Gateway, Bit Station, Mr. Exchange, Bitexpress, Campfire, Raimu, and Payward Japan which runs Kraken exchange.
At the entry point, the FSA said that about 100 companies have shown interest in joining the cryptocurrency industry in Japan.
Getting in has become a lot more difficult following the cyber heist on Coincheck—the biggest of its kind—in January. Post-Coincheck, the FSA has sent out several Improvement Orders to exchanges; conducted stricter inspections and strengthened regulations for pseudo operators. Kraken exchange already announced it was leaving Japan citing rising cost of operating in the Asian country.