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Licensing the activity of Cryptocurrency Exchange in Japan
Japanese legislation on payment services was significantly modified. Since April 2017 amendments to the financial legislation of the country entered into force. Issue concerning exchange of cryptocurrency to traditional settlement funds was regulated for the first time ever. Persons intending to provide such services are obliged to obtain the license for exchange of cryptocurrencies.
Let’s consider certain requirements set by the Japan regulatory body to potential candidates to obtain the license for exchanging operations with cryptocurrencies.
What are the requirements to the company?
Organizational and legal form. There are two situations to consider in context of this point.
- Resident of Japan wants to register the company. In this case it is necessary to register the entity with the organizational and legal form of joint-stock company. Availability of the registered office in Japan is also required.
- Non-resident of Japan wants to register the company. In this case it is necessary to register the branch of foreign company. In the same way, the registered office in Japan is required.
Authorized capital
Minimum amount of authorized capital is equal to 10 million Japanese yen, which are approximately equal to 90 thousand US dollars.
Personnel
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It is mandatory to include to the company staff employees responsible for the financial part of the company operations. The staff also should include at least one resident of Japan as a director. In addition, it is necessary for the company to use professional services of the person or entity, which are related to verifying compliance of the company activity with Japanese legislation.
How long does it take to obtain the license for the cryptocurrency exchange?
Which requirements should be met in daily activity of the company?
The procedure of filing documents to the Japanese regulatory body takes approximately 3-4 months. It includes collection and obtaining necessary documentation, negotiation with regulatory body, as well as procedure of filing documents itself. Waiting for the answer takes 1-2 months.
Points hereinabove were related directly to the licensing of cryptocurrency exchange in Japan. However, individuals and legal entities that represent such services must comply with the following additional requirements: Division of assets of the company and clients; Conducting an annual audit; Implementation of the client identification procedure; Observance of requirements prescribed by law related to personal data protection.
