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Currencies

Japan quizzes virtual currency exchanges on user protections

Marketplaces for bitcoin and the like face new regulations to gain legal status

Japanese regulators are stepping up oversight of brokers and exchanges for bitcoin and other digital currencies.

TOKYO -- Japan's financial watchdog will probe whether exchanges for virtual currencies such as bitcoin provide adequate protection for users, ensuring the companies are up to scratch before they can register to operate with the government.

The Financial Services Agency will question exchanges on whether and how they inform users about topics such as the risk of price fluctuations. The agency then will examine matters including how the exchange manages its digital holdings separately from customer funds and how it conducts maintenance and inspections of its trading systems. If all is found to be in order, the company can proceed to formal registration proceedings.

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