New regulations regarding crypto margin trading introduced in Japan

19 Mar, 2019
by Colin Hawkins
New regulations regarding crypto margin trading introduced in Japan

New regulations for crypto margin trading are being introduced by Japanese financial regulators, according to a local Japanese news outlet, Nikkei on March 18.

Margin trading is the using of borrowed funds from a broker to trade a financial asset, then forming collateral for the loan.

Japan’s financial payment service laws are being edited by the executive branch of Japan's Government, otherwise known as The Cabinet of Japan. Draft amendments have reportedly been approved, limiting leverage in crypto margin trading at 2-4 times the initial deposit.

The new rules for margin trading are expecting to come into play April 2020 and consist of cryptocurrency exchange operators registering within 18 months of April 2020, to enable the Financial Service Agency (FSA) to introduce relevant measures to hone in on unregistered crypto operators. After these rules run their course, those dealing crypto will be monitored much like securities traders in order to protect investors. Crypto operators will also be divided into groups based on if they are engaging in margin trading or those issuing tokens through ICOs.

The FSA commissioner in August of last year, said that the agency wishes the cryptocurrency industry would grow under regulation:

“We have no intention to curb [the crypto industry] excessively. We would like to see it grow under appropriate regulation.”

Read more: Tokyo crypto-police take down the $134,000 Monacoin thief

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