Coinbase would be the first non-Asian exchange to open a licensed trading platform in Japan
Registration with the crypto exchanges’ self-regulatory body will allow it to roll out services in Japan.
American exchange giant Coinbase, which previously applied for an operating license in the country, has now become a second-class member of the JVCEA – the self-regulatory organization given the mandate to oversee the industry by the Financial Services Agency (FSA) in 2018.
The second tier has been unofficially reserved for companies who are at an advanced stage of gaining FSA approval but wish to get in line with compliance issues prior to launch.
The JVCEA audits its members and requires them to adhere to guidelines, such as a current x4 cap on leveraged trading.
Coinbase, Digital Asset Markets, and the Tokyo Hash have registered as reported by the JVCEA. Second-class members with the agency can be registered as cryptocurrency exchange companies, or businesses that are planning to apply.
With the induction of three new members, the list of class 2 members includes nine names. Coinage, OK Coin, Mercury, Payward Asia, WIREX Japan, and CoinBest are also in this category of members with JVCEA.
The businesses registered as cryptocurrency exchange companies or planning to enter the Japanese market, both can apply to become second class members of the JVCEA.
Meanwhile, exchanges willing to offer services in Japan, need to obtain a license from the Financial Services Agency (FSA), the country’s market regulator. The licensing procedure involved meeting a series of standards with regards to system risk management, data security, segregation of customer accounts, KYC requirements, and user protection.
Coinbase was reported to be licensed in Japan in 2019, but hasn’t really made any progress since last year. However, the crypto exchange has found other ways to expand its influence in the Japanese market. For one, by partnering with Bank of Tokyo-Mitsubishi UFJ for Coinbase’s international expansion efforts.
The company first signaled its intentions to move into the Japanese market back in 2018 when it first set up an office in the country. But the FSA is believed to be dealing with a very large backlog of applications – and increased its scrutiny of would-be members after the Coincheck hack of 2018.
If successful, Coinbase would be the first non-Asian exchange to open a licensed trading platform in Japan.