Japan is considering new lightweight legislation for cryptocurrency intermediaries (non-cryptocurrency exchanges), CoinVoice has learned. Last week, the Financial Services Agency (FSA) presented its idea to the Financial System Committee’s Payment Services Working Group.
The FSA gave the example of a gaming app or self-hosted wallet providing access to a third-party app for cryptocurrency trading services and then switching back to the original app. In many cases, the FSA may consider that the app operator is acting as an intermediary and therefore needs to register as a cryptocurrency exchange. However, this is quite onerous if an organization purely acts as an introducer and never touches any funds.
As a result, the government is considering some less stringent proposals that would require intermediaries to register as intermediaries. Intermediaries would be obliged to provide information to users. Intermediaries would be subject to advertising restrictions and could also be liable for damages if things go wrong.
The FSA is considering how to deal with losses. Currently, regulations for other financial services intermediaries that are not part of a large group require margin to cover potential losses. If the intermediary is affiliated with a cryptocurrency exchange, the losses may be borne by the exchange. [Original link]