Japan’s financial regulator approved the registration of 11 cryptocurrency exchanges, making them the first to be allowed to operate under a law change regulating the industry.
BitFlyer and Quoine are among the exchanges registered with the Japanese Financial Services Agency (FSA), the regulator said in a statement yesterday.
Another 17 filed applications before the expiry of a deadline this month and would be allowed to continue operating while the regulator considers approval.
Regulations introduced in April prohibit the buying and selling of virtual currencies by exchanges not registered at the FSA.
The rules aim to protect consumers by ensuring exchanges meet risk management standards, provide information and manage funds appropriately, as well as prevent money laundering and terrorism by requiring identity checks.
The move comes amid concerns over fraud in the initial coin offering (ICO) market and the soaring price of bitcoin that many say has been fueled by speculation.
JPMorgan Chase & Co chief executive officer Jamie Dimon earlier this month said that cryptocurrency is “a fraud” and “worse than tulip bulbs.”
Japan has had its share of controversy regarding bitcoin operators.
Tokyo-based Mt. Gox, once the world’s largest virtual-currency exchange, filed for bankruptcy in 2014, disclosing that it had lost 850,000 bitcoins worth about US$500 million at the time.
While the firm blamed hackers, its former chief executive officer Mark Karpeles went on trial in Tokyo this year, accused of stealing money for personal use and making false deposits into the firm’s accounts.
Separately, South Korea’s Financial Services Commission, which has been stepping up its efforts to regulate virtual-currency exchanges, has banned ICOs, citing an increase in criminal activities involving cryptocurrencies, the Dow Jones Newswires reported on its Web site yesterday.
The South Korean regulator said it would also ban coin margin transactions — buying virtual currency with borrowed money — adding that the penalties for violation would be “stern.”
Meanwhile, a panel of Greek judges has opened the extradition hearing of Russian cybercrime suspect Alexander Vinnik, who is wanted in the US in a US$4 billion bitcoin fraud case.
At the start of yesterday’s hearing in the northern city of Thessaloniki, Vinnik, 37, said he would fight the extradition.
Complicating matters, Russia also wants his extradition on separate fraud charges.
A panel of judges is expected to examine that request next week, which Vinnik’s lawyer has said he will not challenge.
Vinnik was on July 25 arrested while on vacation in Greece and detained pending the extradition hearing following a request from the US Attorney’s Office in the Northern District of California.
Additional reporting by staff writer and AP
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