Revised cryptocurrency regulation law comes into force this Friday in Japan. A few days before BitMEX announced its closure for Japanese residents.
Bitmex is one of the best-known cryptocurrency exchanges and the leading derivatives trading platform. The company announced this week about restricting access to all Japanese residents from 23:00:00 JST 30 April 2020.
The decision is made due to Japan’s amended cryptocurrency regulation law, says the official announcement:
The restrictions are in response to the amendments to the Japan Financial Instruments and Exchange Act and Japan Payment Services Act effective as of 1 May 2020 following the cabinet order earlier this month.
The exchange, however, expressed support for Japanese regulators. It claims that regulations will help set standards for cryptocurrency products. BitMEX believes these standards will underpin the development of a rapidly growing crypto asset class.
User restrictions
The restrictions affect both new and existing Japanese users. As said in the statement, Japan residents registering on the BitMEX platform for the first time will be unable to trade.
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Furthermore, any existing registered customers who are Japanese residents will not be able to place orders to open a new position or increase an existing open position. Meanwhile, open positions will not be affected and will continue in accordance with the terms of the relevant contract.
Cryptocurrency regulation in Japan
Japan, although an active country in the cryptocurrency industry, had no official regulations to supervise it. To bring a kind of legal status for digital assets, the country revised its current Payments Service Act (PSA) and Financial Instruments and Exchange Act (FIEA). The new amendments come into force on May 1st.
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Revised cryptocurrency regulation means tighter restrictions on crypto custodians. Any digital asset exchange that operates in Japan will be obliged to manage the user’s funds separately from its own. This means additional costs on finding third-party custodian or cold wallets to secure user’s funds.
Besides, new amendments of FIEA will also apply to crypto derivatives trading. Activities like using rumors or fraudulent means to trade crypto assets or crypto derivatives will be prohibited.
BitMEX is not the only crypto industry player, which suffered from cryptocurrency regulations this week. DailyCoin recently reported about the Dutch crypto savings platform, that had to shut down due to tighter anti-money laundering regulation in the European Union member country.
