The Japanese government has tightened its stance towards crypto margin trading after reviewing its current laws pertaining to governing payment services and financial businesses.

The new laws will mean that parties who are seeking to trade financial assets using funds via a broker will be eligible to participate in crypto margin trading at “two to four times the initial deposit.”

These new laws are expected to come into effect roughly one year from now. Digital currency businesses are required to register with Japan’s financial watchdog – Financial Services Agency (FSA), who will oversee the regulation of exchanges as well as clamping down on illegal cryptocurrency platforms.

In a move that aims to protect the investor, the FSA plans to treat crypto traders in the same manner that they enforce upon traders who trade in securities.

Furthermore, to ensure that the regulation is efficient, the FSA will separate crypto margin traders from traders offering initial coin offerings (ICOs).

With this strategy, the FSA hopes to eliminate the threat of scammers in the markets by protecting investors from pyramid schemes and other forms of malicious scams.

Earlier this year, the FSA stated that it is exploring new avenues to comprehensively define the sections in the country’s laws which provide unregistered firms with loopholes to request funding through digital assets.

Notably, in the past, the regulator has claimed that it is not fighting the growth of the cryptocurrency sector in the country. Instead, the FSA are supporting the community by bringing in proper regulatory processes and laws which will ensure that the country’s crypto market will flourish with the correct legal framework.

In addition to this, the FSA has in the past toyed with the notion of abolishing the Payment Services Act in regulation virtual currency exchanges and instead utilise the Financial Instruments and Exchange Act.