Japan introduces stricter regulations for cryptocurrency margin trading


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Japan is introducing new cryptocurrency margin trading rules, as reported by the Japanese news agency Nikkei on the 18thof March, 2019. The idea is to bring more “order” in the crypto space and all exchanges that fail to follow the new regulations will be closed.

The new amendments to the Japanese payment and financial services laws point that there will be a cap on the leverage in all cryptocurrency margin trading transactions, set at 2 to 4 times the initial deposits. The Cabinet of Japan has reportedly approved the new amendment. While this may seem a bit steep as a regulation, the new amendment is actually in line with the one in FX trading.

More importantly, all cryptocurrency exchanges will be required to adopt the new regulation for the crypto margin trading. This will, however, apply only for exchanges that handle such margin trading transactions.

The new rule will come into effect in April 2020. According to press:

Margin cryptocurrency exchange operators would need to be registered within 18 months of that date. Big-name brokerages looking to enter the game would likely need to re-register for that purpose.

As a result, all exchanges that handle such services will be monitored closely. In addition to this, all virtual currency operators will be separated in groups that engage in ICOs and those in margin trading only.

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Japan introduces stricter regulations for cryptocurrency margin trading

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