Japan’s primary financial regulator is expanding its team of 30 individuals screening license applications from cryptocurrency exchange operators to meet soaring interest at a time when mainstream companies like Yahoo, Rakuten and LINE are entering the sector.
Speaking during a study group meeting centered on cryptocurrency on Wednesday, Financial Services Agency (FSA) vice commissioner for policy coordination Kiyotaka Sasaki revealed the agency’s “biggest problem” is in the way it deals with new operators vying for licenses to establish cryptocurrency exchanges in the country.
As Reuters Japan reports, the regulator expects in excess of 160 applications from companies looking to launch crypto exchange platforms in a regulated market. The FSA currently staffs 30 individuals in a team that monitors crypto trading, unregistered operators and the review process of new applications.
With a focused policy to specifically allocate personnel to the registration review process, Sasaki revealed the agency is tacking its understaffing concerns by adding 12 additional members to the team.
According to the FSA’s own statistics released in April this year, Japan has over 3.5 million active cryptocurrency traders in the country with annual trading in bitcoin alone totaling $97 billion in 2017. Ethereum, ripple (XRP), bitcoin cash (BCH) and litecoin (LTC) are also among the most-traded coins in Japan.
After pioneering legislation that recognized bitcoin as a legal method of payment in April 2017, Japanese law mandated all new cryptocurrency exchanges – domestic or international- with a presence in Japan to register and earn a license from the FSA.
The FSA has been ramping up its scrutiny into the sector following the infamous $530 million hack of unlicensed Tokyo-based exchange Coincheck, in January, going so far as to crack the whip at six already-licensed cryptocurrency exchanges with business improvement orders. The regulator also issued its first-ever rejection of a crypto exchange license application in June.
Still, the FSA’s new chief has ruled out excessive regulation of the industry, backing the industry to grow while a number of key Japanese technology giants including Yahoo, Rakuten and LINE begin to operate their crypto exchanges.
The FSA’s new commissioner Toshihide Endo said in late August:
“We have no intention to curb [the cryptocurrency sector] excessively. We would like to see it grow under appropriate regulation.”