BitMex will bar Japanese traders from its platform.
In a notice released some few minutes ago, the Seychelles-based cryptocurrency derivatives platform said effective April 30, new traders from Japan will be barred from creating accounts while registered clients won’t be able to place new orders from May 1.
This is in response to a new cabinet order and the amendments to the Japan Financial Instruments and Exchange Act and Japan Payment Services Act which will be enforced from May 1, 2020.
It’s a blow, not only for traders but for the larger cryptocurrency ecosystem considering the role of the ramp being the largest in the world and therefore one of the most liquid enabling the free flow of funds in and out of Bitcoin and other supported digital assets.
Part of the notice read:
“With effect from 23:00:00 JST 30 April 2020 (for users registering for the first time), and 00:00:00 JST 1 May 2020 (for existing registered users), we are restricting access to users who are Japan residents.”
“This will mean a user who is a Japan resident registering on the BitMEX platform for the first time cannot trade and any existing registered customers who are Japan residents cannot place orders that would open a new position or increase an existing open position.”
In 2019, the Japanese cabinet passed the Payment Services Act (PSA) and Financial Instruments and Exchange Act (FIEA) introducing fresh changes to regulate cryptocurrency and digital asset trading and custody. These laws will in effect give digital assets a legal status in a country where until now had no clear laws defining what they were.
Upon enforcement, digital assets will be identified as crypto assets instead of virtual currency with a stricter control on crypto custodians.
Under FIEA, STOs and ICOs, which are novel crowd funding methods for blockchain-based projects will also be defined.
Cryptocurrency exchanges are also under the tight grip of the country’s main regulator, the FSA, will be required to segregate funds.
Japan’s crypto exchanges will be required to get the services of a third-party to safe-keep client funds. Moreover, all forms of crypto derivatives will now be regulated by the FIEA.