By Japan’s Financial Services Agency (FSA) recently announced that it would be introducing new rules pertaining to cold wallets for storing cryptocurrencies at crypto exchanges as reported by Reuters on April 17.
Reuters cited a source which is familiar with the matter and reported that Japan’s financial regulator will allegedly require all crypto exchanges to bolster the internal supervision of cold wallets/devices for storing cryptocurrencies which are not connected to the web.
By the implementation of the new regulation, the FSA purportedly addresses the many issues of ensuring the security of digital currencies as well as other risks faced by the nation as it has intentions of boosting the fintech industry in an effort to stimulate economic growth.
Despite the fact that cold wallets are offline in nature and thus provide better security for the storage of digital assets, the FSA argues that there could be a risk of internal theft. According to the FSA’s source, many exchanges do not have policies in place should the person responsible for storage be regularly rotated out.
Earlier this month, the FSA was presented with arguments around the fact that Bitcoin can no longer be classified as currency. During a plenary session at the 41st General Assembly of the Financial Council and the 29th Financial Division Meeting, Professor Goto of Kyoto University presented his argument that bitcoin had evolved into something that is beyond just a means of transacting due to its borderless features.
Back in March, the FSA approved the second crypto exchange to begin offering services under new regulations. The firm began dishing out licenses to new crypto exchanges interested in servicing the Japanese market.
The new licensing scheme, which currently has a long waiting list, was in reaction to the events that took place in the last few years, most notably Coincheck’s loss of half a billion dollars in a hack back in January 2018.
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