Liquid secures Japanese regulators’ nod to launch cryptocurrency derivative trading

abdelaziz Fathi

Japanese cryptocurrency platform Liquid.com has been registered as a Type I Financial Instruments Business in Japan under the Financial Instruments and Exchange Act. The new approval was obtained under its Japanese subsidiary, QUOINE Corporation.

The new licence allows Liquid to expand its cryptocurrency derivative trading services for Japanese users.

Liquid, which was the first exchange to be officially licensed by the Japan Financial Services Agency (JFSA), also plans to use the new approvals to help fuel their expansion across Asia and build new products.

“The Type 1 license issuance is the culmination of a great deal of preparation and collaboration by the entire Liquid team.  It is also a validation that trading derivatives in crypto can be done in a compliant manner with full customer protections & transparency,” said Liquid’s chief operating officer Seth Melamed.

Liquid is a Tokyo headquartered bitcoin and cryptocurrency exchange in Japan. The FSA-regulated venue also operates a clearinghouse for fiat-backed stablecoins which facilitates swaps, FX trading, and digital fiat onramps/offramps. The leading exchange was in the news earlier in August when hackers breached its systems and extracted more than $90 million in cryptocurrencies.

Japan stands out in Asia when it comes to the regulatory aspect, especially after several jurisdictions, such as China and India made it nearly impossible for crypto firms to exist. As a result, Liquid’s expansion further confirms that Japan will continue to quest to become a global cryptocurrency hub.

Recently, several crypto exchanges have relaunched their operations in Japan. San Francisco-based Kraken revived its trading services for Japanese residents, nearly two years after it exited the lucrative market when regulators stepped up oversight in the country.

The Japanese subsidiary of Kraken was awarded a license to trade as a crypto-asset exchange operator under the Payment Services Act. In addition, the firm secured its membership of the Japan Virtual Currency Exchange Association (JVCEA), the self-regulatory organization that has the mandate to oversee the industry.

Kraken was among the few platforms permitted to offer crypto services without a license in Japan while it sought to meet the rules that established bitcoin as a legitimate payment method. However, the exchange withdrew its services in 2018 due to rising costs of maintaining its business there, but indicated at the time it could return in the future.

At the time, Tokyo regulators became more cautious and tightened its grip in the wake of a cryptocurrency heist that saw nearly $540 million worth of customer crypto assets lost at Coincheck.

 

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