Japan Implements Significant Changes to Cryptocurrency Regulation Today | Regulation Bitcoin News
Major changes are happening in the cryptocurrency space in Japan as new cryptocurrency regulation enters into force today. Among notable changes are the regulation of crypto custody service providers and crypto derivatives businesses. Japan has 23 regulated crypto exchanges; unregulated platforms have modified their terms of service affecting Japanese residents.
The amendments to the Payment Services Act (PSA) and the Financial Instruments and Exchange Act (FIEA) that revise the regulatory framework for cryptocurrency in Japan go into effect on May 1. They were proposed by the country’s top financial regulator, the Financial Services Agency (FSA), and adopted by the Diet on May 31 last year. The finalized rules were published on April 3 along with the FSA’s answers to public comments. International law firm Morrison & Foerster described:
The regulations coming into effect as of May 1, 2020, represent a significant change in the way the FSA will regulate cryptocurrency-related business activities of operators in Japan going forward.
Among the major changes are the regulation of cryptocurrency custody service providers that do not sell, purchase, or intermediate the sale and purchase of cryptocurrencies and cryptocurrency derivatives businesses. The former now falls under the PSA while the latter must register under the FIEA. A crypto derivatives business that also provides crypto custody service may need to register as a cryptocurrency exchange. In addition, the FSA previously explained to news.Bitcoin.com the implication of the new law on the possibility of a bitcoin exchange-traded fund (ETF) being approved in Japan.
The amendments “are quite extensive and many issues regarding the scope, applicability, and relevance of the regulations remain open to interpretation,” the law firm opined. The regulatory changes are summarized here.
Japan currently has 23 FSA-approved cryptocurrency exchanges. As the new regulation takes effect, unlicensed crypto trading platforms modify their terms of service to exclude Japanese users in compliance with the new law.
Global cryptocurrency exchange Bitmex, for example, announced that it would stop providing services to Japanese residents starting from 11 p.m. JST on April 30 for first-time registered users and 12 a.m. on May 1 for existing registered users. “We are restricting access to users who are Japan residents,” the exchange confirmed on Tuesday, adding:
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.
“We will continue to work with the Japanese regulatory authorities to support their aims for the Japan market and will keep our Japan users updated,” Bitmex wrote.
Furthermore, the FSA announced on April 30 that it has approved two self-regulatory organizations (SROs) in the crypto sector: the Japan STO Association and the Japan Virtual and Crypto Assets Exchange Association (JVCEA). These organizations work closely with the FSA to enforce strict standards on the country’s crypto sector.
What do you think about Japan’s new cryptocurrency regulation? Let us know in the comments section below.
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Author: Regulation by Kevin Helms
Bitcoin News Roundup for Oct. 6, 2020
Options market data suggests the longer-term path of least resistance for bitcoin is to the higher side.
Stock of three major cryptocurrency mining firms are appearing in Fidelity, Vanguard and Charles Schwab mutual funds.
John McAfee allegedly received $11.6 million in bitcoin and ether for pumping ICOs in 2017 and 2018.
A prominent Taiwanese-American multimedia artist considered a pioneer of internet-based art is releasing her work on blockchain-based platform MakersPlace.
It’s Decision Time for Bitcoin as Technicals Suggest a Crucial Breakout Pattern
Bitcoin price is extending its rise above $10,750 against the US Dollar. BTC is now approaching a crucial breakout zone near $10,850, $10,920, and $11,000.
Bitcoin price found support near the $10,350 zone and recently started a decent recovery wave against the US Dollar. BTC broke the $10,550 and $10,650 resistance levels to move into a short-term positive zone.
The upward move was such that the price was able to climb above the 50% Fib retracement level of the main drop from the $10,930 high to $10,387 low. The bulls were able to push the price above the $10,750 level and it tested the $10,800 resistance.
The price is currently facing selling interest near the 76.4% Fib retracement level of the main drop from the $10,930 high to $10,387 low. It seems like yesterday’s highlighted important rising channel is active with support near $10,720 on the hourly chart of the BTC/USD pair.
Bitcoin price climbs above $10,750. Source: TradingView.com
The price is now approaching a couple of major hurdles near $10,850, $10,920 and $11,000. A successful daily close above the $11,000 resistance level is needed to start a strong upward move.
The next key resistance is near the $11,200 level, above which the bulls are likely to aim a test of the $11,500 level in the near term.
If bitcoin fails to continue higher above the $10,850 resistance or the $10,920 hurdle, there is a risk of another bearish reaction. An initial support on the downside is the channel trend line at $10,720.
A break below the channel support could lead the price towards the $10,650 support. The next major support is near the $10,600 level since it is close to the 100 hourly simple moving average.
Hourly MACD – The MACD is currently struggling to gain momentum in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently flat near the 60 level.
Major Support Levels – $10,720, followed by $10,650.
Major Resistance Levels – $10,800, $10,850 and $10,920.
Author: Aayush Jindal
Bitcoin Open Interest on BitMEX is Down 25% Since the CFTC News Broke
Bitcoin’s market dynamic has been shifting over the past week. The CFTC’s pursuit of the BitMEX co-founders has sparked some fear regarding the safety of funds on margin trading platforms that could be vulnerable to regulatory crackdowns in the US.
Although BitMEX – and virtually all other crypto derivatives platforms – are registered offshore and limit US-based IP addresses, the country’s control over the .com infrastructure and international legal reach makes it a force to be reckoned with.
Because of lower than usual trading volumes on margin trading platforms like BitMEX, the market has been less volatile, and less prone to seeing knee-jerk reactions to bearish news.
This may be why Bitcoin’s price has remained strong in the face of multiple bearish news developments, which would typically catalyze far-reaching selloffs.
While contextualizing the magnitude of the outflows from BitMEX, analytics platform Glassnode explained that one fourth of the open interest on the platform has been eliminated, bringing the remaining OI down to levels not seen since May.
Bitcoin’s price has been shockingly unmoved by the recent news surrounding the $150m KuCoin hack as well as the CFTC’s pursuit of the three BitMEX co-founders.
In the past, these types of news developments have led the markets to see serious selloffs that alter mid-term trends.
That being said, this time was different, as the price action seen following the initial 5% selloff has favored bulls.
BTC is now trading less than 2% below where it was prior to the news reports regarding the BitMEX imbroglio, indicating that it wasn’t a trend-defining event.
Bitcoin open interest on BitMEX has seen a rash decline in recent days, plunging by nearly 25% due to concerns of funds potentially being locked in the platform if the three co-founders are all arrested, or if the site is seized by authorities.
According to Glassnode, OI is now sitting around $450 million, down from pre-news highs of $590 million.
“Bitcoin open interest in perpetual futures contracts on BitMEX saw a significant decline as well. It decreased by almost 24%, from $590M to currently $450M – levels not seen since May 2020.”
Image Courtesy of Glassnode.
Until there is more clarity regarding BitMEX’s fate, open interest on the platform will likely continue declining, contributing to greater Bitcoin price stability.
Author: Cole Petersen
Bitcoin News Roundup for Oct. 6, 2020
Following the definitive ban of cryptocurrency derivatives in the United Kingdom, cryptocurrency companies in the country shared their thoughts on the matter with Cointelegraph.
Among the most affected is CoinShares, a U.K. company known for providing cryptocurrency exchange-traded notes, or ETNs. Unlike exchange-traded funds, ETNs do not necessarily own the underlying asset and are instead a way of tracking the returns of a particular index. When they mature, holders pay or receive the difference between the initial purchase price and the return of the underlying index.
Crypto ETNs fell under Tuesday’s broad ban by the Financial Conduct Authority, along with products like crypto futures, options, CFDs and other derivatives.
The regulators’ stated concern involves the risks that such products pose, especially since their derivative nature makes it possible to open highly risky leveraged positions. The ban does not impact direct crypto trading in any way, which remains open to retail investors and often features leverage as well, albeit with milder amplification.
However, CoinShares ETNs are completely unleveraged, or “delta 1x” in financial terms, meaning that they track the underlying prices one-to-one. Townsend Lansing, head of product at CoinShares, expressed his disappointment in the decision in a conversation with Cointelegraph:
“We are extremely disappointed by the FCA’s decision to include delta 1 ETNs in its ban on distribution of crypto derivatives to retail investors in the UK. We and many other industry participants put forward a number of reasons why such a ban would be ill-advised and would not benefit retail investors. Unfortunately, the FCA ignored those reasons, or dismissed them with little additional information.”
According to Lansing, the ban will have the opposite intended effect, as it will “simply drive UK retail investors to unregulated crypto exchanges.” He claimed that even the FCA believes these have “far fewer protections than the regulated ETNs offered by CoinShares and other providers.”
It is curious that the FCA’s ban affected a product that is arguably safer and more regulated than directly buying cryptocurrencies.
Danny Scott, CEO and Co-Founder of U.K. crypto exchange CoinCorner, told Cointelegraph that the FCA is “comfortable with [crypto] assets and seemingly have a pro stance, they’re just not comfortable with companies packaging them up in traditional trader focused products that the everyday person doesn’t understand.”
Scott added that in the company’s understanding, “this doesn’t affect Bitcoin exchanges like ourselves, but it will affect companies such as Revolut and eToro that offer a CFD rather than the asset itself.”
Lansing was nevertheless much more negative about the regulator’s efforts. “The FCA made it clear in their initial consultation and in the draft rules: they do not believe digital assets such as Bitcoin have value and therefore, they believe they are fundamentally unsuitable for investment.”
He suggested that the FCA’s retail crypto trading ban extends to the “limit of their regulatory perimeter,” which could explain why it includes ETNs despite their seemingly lower risk profile.
Nonetheless, the FCA’s previous efforts were primarily centered around upping the standard of regulatory compliance in crypto to that of the traditional finance sector. A heavy handed ban appears to be out of character for the agency, which could have opted for more nuanced restrictions to derivatives trading — for example limiting maximum leverage.
When asked if CoinShares expected the decision, Lansing replied:
“We were extensively involved in the FCA consultation process and had several meetings with the FCA in an attempt to dissuade them from banning ETNs. As a result, we could see first hand the FCA’s disapproval of the digital asset class. So, to that extent, we knew there was a meaningful probability that the FCA would enact the ban as proposed.”
He nevertheless reassured that the company is sufficiently diversified to withstand such a blow.
Author: Published 3 hours ago on October 6, 2020
By Republished by Plato