Provisional Translation

Q.

With regard to quasi-virtual currency broker dealers being inspected by the Financial Services Agency (FSA), the FSA is currently screening those quasi-virtual currency broker dealers to determine whether or not to approve them as registered broker dealers. Would you please tell us how this screening is going and what points in particular will be emphasized if those companies are granted registered broker dealer status?

A.

I have no comment regarding the state of progress in this screening but, when a company is approved as a registered broker dealer, a company must be examined in the registration screening from the following viewpoints; whether there is the issue of cybersecurity or not, whether the company has a proper IT system risk management system, whether the virtual currency deposited by customers is properly segregated and separately managed from the company’s own holdings, whether it has internal control systems, such as measures to control such risks as money laundering, and whether these measures are not simply formalities but robust and proper measures. In any case, our on-site inspections of quasi-broker dealers will continue to check their state of preparedness, and we will be exercising careful scrutiny in determining whether to approve these quasi-broker dealers as registered broker dealers.

Q.

Do you have any comments on roughly how long this will take?

A.

I cannot say anything at the moment. The further we proceed, the more that is likely to emerge.

Q.

With regard to the registration screening of quasi-virtual currency broker dealers, as you believe that the further you proceed, the more that will emerge, is it your impression that a good number of the currently 16 quasi-broker dealers will be denied registration?

A.

As I said in the beginning, I have no comments on circumstances at the moment.