The government of Japan has made a number of changes to the current cryptocurrency law. Now they will be called "cryptographic assets", and the activities of exchanges will be under more stringent control. In this way, the regulation of the cryptocurrency market in Japan will become more accurate to comply with international rules.
Some amendments to the law legally formalize the requirements of international organizations for cryptocurrencies. It was at the G-20 summit that it was decided to call them cryptographic assets. The problem is that disagreement in terminology leads to collisions in international financial relationships.
G20 - the union of the largest countries in the world in terms of the economy The organization was created at the end of the last century. It is a club where the leaders of the powers find solutions to the most important economic and political problems.
Back in February 2018, the Financial Services Agency of Japan (FSA) adopted this very term. Now there will be no disagreement at the legislative level. Prior to that, there was no consensus in the country about the name of the financial instrument, which led to certain difficulties.
More importantly, the new amendments significantly changed the approach to the work of cryptocurrency exchanges. Now they will be required to create financial reserves in case of force majeure. And to compensate customers for all losses due to leakage of funds after hacker attacks.
Moreover, now cryptocurrency exchanges will have to keep funds in “cold wallets”. That is, any access using hardware keys will be denied. Of course, this will save customers' funds, but will significantly complicate operations.
A cold wallet is a cryptocurrency repository, which can be accessed only after manually entering a username and password. And they can be simply printed on plain paper, which makes in principle impossible any hacker method of hacking data.
It turns out that the capital of the crypto exchange will be divided into two parts. One of them is in absolute safety cold storage. And the other may lie on the hardware wallet. But at the same time the exchange should have a reserve for this amount.
The Japanese authorities were among the first to legalize the circulation of cryptocurrencies, which made the country a kind of testing ground. Its exchanges were subject to numerous hacker attacks, some of which proved to be successful.
The total losses of Japan's cryptocurrency exchanges due to hacker attacks in the first half of 2018 amounted to more than $ 540 million. Only in the autumn of 2018 did attackers manage to withdraw about $ 60 million from the Tech Bureau Corp site.
In some cases, the funds could be returned to the owners, but sometimes the clients of the sites lost their money. New regulatory rules will protect their interests in all situations. Now there are 16 licensed sites in the country, more than 100 companies are waiting for a decision from the FSA about their admission to this market.