Japan’s Financial Services Agency (FSA) has reportedly revealed plans to provide regulation of cryptocurrency wallet service providers, according to a report from Bitcoin News. The news comes just weeks after the agency granted self-regulatory status to the nation’s cryptocurrency industry.
The proposed regulatory framework appears to be designed to address apparent ambiguity about the regulatory status of crypto wallet services. While crypto exchanges are now permitted to regulate themselves, they are still required to register with the FSA to operate within Japan. Wallets, which are not considered trading services or exchanges, technically exist outside that self-regulatory environment.
However, the proposed rules will apparently only target so-called “custodial” wallets under the control of third-parties. Rather than focusing on software and hardware wallet developers, the agency’s plan will address regulation of those wallet service providers.
The plan reportedly proposes possible regulation of internal control systems and enforced separation of customer and service provider crypto assets, as well as new requirements for financial statement audits and published policies dealing with hack responses and customer repayment procedures.