Japan’s Financial Services Agency proposes lightweight legislation for non-exchange crypto intermediaries

Japan is considering new lightweight legislation for cryptocurrency intermediaries that are not cryptocurrency exchanges. Recently, the Japanese Financial Services Agency (FSA) presented its own ideas to the Payment Service Working Group of the Financial System Committee.

In 2017, Japan introduced legislation for Cryptocurrency Asset Exchange Service Providers (CAESP), covering the buying and selling of cryptocurrencies, acting as brokers, managing funds related to these services, or providing custody. However, many so-called introducers who do not operate cryptocurrency exchanges do not consider themselves to be CAESPs.

Therefore, the FSA is considering proposing that they register as intermediaries. Introducers are obliged to provide information to users, will be subject to advertising restrictions, and may be liable for damages if problems arise.

The FSA also considered how to handle damages. Current regulations for other financial service intermediaries not belonging to larger groups require the provision of collateral to pay potential damages. If the intermediary is affiliated with a cryptocurrency exchange, the damages may be borne by the exchange.