Cryptocurrency exchanges get approval to operate in Japan

Japan’s financial regulator approved the registration of 11 cryptocurrency exchanges, making them the first to be allowed to operate under a law change regulating the industry.

BitFlyer and Quoine are among the exchanges now registered with the Financial Services Agency, the regulator said in a statement on Friday. Another 17 filed applications before the expiry of a deadline this month and will be allowed to continue operating while the regulator considers approval.

Regulations introduced in April prohibit the buying and selling of virtual currencies by exchanges not registered at the FSA. The rules aim to protect consumers by ensuring exchanges meet risk management standards, provide information and manage funds appropriately as well as prevent money laundering and terrorism by requiring identity checks.

The move comes amid concerns over fraud in the initial coin offering market and the soaring price of bitcoin that many say has been fueled by speculation. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said earlier this month that the cryptocurrency is “a fraud” and “worse than tulip bulbs.”

Japan has had its share of controversy regarding bitcoin operators. Tokyo-based Mt. Gox, once the world’s largest virtual currency exchange, filed for bankruptcy in 2014, disclosing that it had lost 850,000 bitcoins worth about $500 million at the time. While the firm blamed hackers, its former CEO Mark Karpeles went on trial in Tokyo this year, accused of stealing money for personal use and making false deposits into the firm’s accounts.

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Now read: South Korea bans initial coin offerings

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Cryptocurrency exchanges get approval to operate in Japan