Following the international regulatory path, Japan will begin regulating Bitcoin in October

According to The Japan Times, the increased regulation is intended to ensure that companies can comply with the Payment Services Amendment Act, which was passed in April this year and sets operating standards for exchanges and recognizes Bitcoin as a legal currency.
An FSA official reportedly stated that the purpose of the regulation is to regulate exchanges and ensure the healthy development of the digital currency market. The official said:
"We hope to promote market growth while implementing regulation. Our goal is for the market to develop in a healthy way."
The Payment Services Act, passed earlier this year, sets out anti-money laundering and know-your-customer (KYC) rules for exchanges, while also hoping to protect them from the risk of cyberattacks by enforcing security standards.
The bill stipulates that all exchanges must report to the authority by the end of September to confirm that they comply with the new regulations. If necessary, the FSA has the right to conduct on-site inspections.
To monitor more than 20 cryptocurrency exchanges operating in Japan, the FSA set up a special monitoring team last month, reportedly consisting of 30 staff members. The team checks whether virtual currency exchanges manage customer assets separately from their company assets and whether they have appropriate risk management measures, including how to respond to cyber attacks.
Japan is no stranger to cryptocurrency fraud: According to reports, there were 33 such cases in the country in the first seven months of 2017, resulting in losses of more than $500,000.
As the main virtual currency, Bitcoin price has soared 4-5 times since the beginning of the year, and then fell sharply. Although Bitcoin has been strictly suppressed by China, the price of Bitcoin has risen sharply, leading BCC (Bitcoin Cash Fork), and BCC futures have plummeted. Some companies use virtual currencies to raise funds such as ICO (initial token offering), but many scammers have targeted ICO, causing it to be criticized.
The 2014 bankruptcy of Japanese bitcoin exchange Mt Gox, which wiped out millions of dollars in customer funds, has been cited by Japanese lawmakers as a major impetus to regulate the digital currency industry.
The FSA will begin "comprehensive monitoring" of Bitcoin exchanges in Japan in October. The FSA will strengthen supervision of digital currency transactions by reviewing their internal systems (including customer assets), and also authorizes regulators to conduct "real-time" inspections of Bitcoin transactions. Before launching the Bitcoin transaction supervision plan, Japan has legally designated Bitcoin as a compliant payment method.