Japan is one country which is trying to regulate the cryptocurrency industry with the liberal mindset. That is why, the FSA of Japan, financial services agency is not only providing licenses to cryptocurrency exchanges but also actively monitoring the security of these cryptocurrency exchanges.
Recently, it issued an order that the cryptocurrency exchanges should do more in order to alter the attempts of various criminals and other individuals to launder money with the help of cryptocurrencies. As a result, Bitcoin fell by 9%. Bitcoin fell all the way up to $ 6100. It even broke the $ 6400 low which it had created a couple of weeks back. It is currently trading at the lowest levels since February 6.
Suspension of new account creation:
The regulator also instructed cryptocurrency exchange bitFlyer to suspend the activation of new accounts. It instructed the exchange to make proper improvements and abide by the anti-money laundering practices before resuming the creation of new accounts. bitFlyeris the largest cryptocurrency exchange in Japan. As a result, the cryptocurrency volumes in Japan are dwindling as well. That is why bitcoin fell by such a significant amount after the news came out.
According to the cryptocurrency exchange, the cryptocurrency exchanges are well aware of the problem and each and every employee of the cryptocurrency exchange is working in order to ensure that there is no money laundering through the cryptocurrency exchange. They are taking steps actively in order to abide by all the rules and regulations.
The financial services agency did not just issue this order to a single cryptocurrency exchange but also to all the cryptocurrency exchanges. As a result, the volumes in all of the cryptocurrency exchanges have been impacted. The amount of volumes generated by Japan in the Bitcoin trade is around 60% on a daily basis. Thus, any kind of reduction of these volumes will lead to further reduction of Bitcoin prices. That is why the market has been impacted.
Since Bitcoin still holds a lot of influence over the other cryptocurrencies, fall in Bitcoin also lead to falling in other cryptocurrencies like Ethereum and ripple. Ethereum fell by 9% whereas Ripple fell by 7%. The smaller cryptocurrencies like Bitcoin Cash and Litecoin fell by almost 11%. This clearly indicates that the market is hurt by the new directives which are issued by Japan’s financial services agency. It remains to be seen how fast; the cryptocurrency exchanges abide by these regulations so that they are able to open up for newer customers.